When trying to get a mortgage or a car loan, banks put on their judgment glasses and look into your past. Makes sense; it’s a reasonably reliable indicator of whether or not you can pay back your loans. The study financing looks a little different. Sure, your past does matter, but for many educational institutions, getting a degree will dramatically change your earning potential, and therefore your ability to repay. With the philosophy that the current student loan systems perpetuate the get-rich-richer systems, Step funding takes a different approach and has just raised $ 12 million to help the company take a few steps forward.
The company’s core theme is equality and access to education – one of the most important indicators of whether someone has a chance for financial advancement. As you might expect, there are various privileges (can your parents help pay your loans) and, more specifically, institutionalized racism. Stride Funding takes on the $ 130 billion student loan industry with $ 1.6 trillion in outstanding loans.
Since completing the seed round in 2019, Stride has increased its student-provided capital to over $ 50 million, with financiers like Silicon Valley Bank looking to raise hundreds of millions of additional funds. The company’s primary goal is to make education more available, especially to populations who have traditionally struggled to secure funding.
“There is this massive gap in access to capital when it comes to lending to students,” says Tess Michaels, CEO and founder of Stride Capital. “Ninety-two percent of personal loans require co-signers, and less than a quarter of students actually have access.”
The company announced today that it has closed $ 12 million in Series A funding, led by Fireworks company (co-founded by Brigette Lau and Ashley Bittner). Other investors are impact investors like Juvo Ventures and Graham Holdings – alongside the previous investors GSV Ventures, Slow Ventures and Sinai Ventures. The Stride Funding team has a personal mission at the heart of their business:
“My parents both immigrated to the United States, and education was their path to economic mobility. Education opens doors. And unfortunately, for many historical reasons, many people, especially underrepresented populations, are simply excluded from the market, ”says Michaels, underscoring how this difference widens the gap between the haves and the haves. “I feel very committed to the mission. We have supported so many really, really great, inspiring students, from refugees to DACA students, women, underrepresented minorities and so on. We get such encouraging stories from students all the time, and it only confirms that it’s worth doing. “