Everyone knows that student loan debt is a major problem in the United States.
What not many people know is that there are over 120 federal and state programs designed to help borrowers lower their monthly payments, or, in some cases, forgive their debt entirely.
That’s due in large part to the fact that information on the myriad of “federal income-driven repayment plans,” as well as the terms and conditions that impact eligibility, lives on the Department of Education’s website. As you might expect, navigating a government website can be a time-consuming process, and there’s no easy way to compare plans to find the one that bests matches a borrower’s needs and financial goals.
Fortunately, New York-based Summer has developed a solution. The startup has built a platform that helps borrowers quickly and easily find the programs they’re eligible for and apply.
“The dearth of options in this space is really remarkable, given that 45 million Americans currently owe $1.5 trillion in student loans,” said COO and co-founder Paul Joo. “Private student loans are less than 10 percent of the overall student loan landscape. We wanted to build a product that addressed the remaining 90 percent.”
In addition to helping users learn which programs they qualify for, Summer’s algorithms also personalize the experience. Share your income and financial goals — buying a house, for example — and you’ll get recommendations for eligible programs that help you hit them.
Summer’s platform is offered to companies, universities and organizations, which offer it to their employees, members and students as a benefit. Joo said 10,000 users have saved $8 million on their loans, which is impressive given that the startup launched just this past spring.
The dearth of options in this space is really remarkable given that 45 million Americans currently owe $1.5 trillion in student loans.”
This success hasn’t gone unnoticed by investors, who recently injected the startup with $10 million in new capital. Summer’s Series A was led by QED Investors, a boutique venture capital firm based out of Alexandria, Virginia, and also featured participation from Story Ventures, NextView Ventures, Greycroft and General Catalyst.
“This round allows us to grow the team and expand our reach to help a lot more borrowers,” said Joo. “The plan is to triple our headcount over the next two years.”
Summer currently has a headcount of 14, and Joo said about half of the company’s new hires will be for its technical team. In addition to data scientists and engineers, the design, marketing and customer success teams will also grow.
“We look for people excited to take ownership,” said Joo when asked what they look for in new hires. “At a company of our stage, you’re really taking ideas and owning them. We also look for empathy, both for the borrowers we work with and with each other.”
Those new hires will help make the platform more comprehensive by giving borrowers the ability to apply for state programs — Joo said private options are on the roadmap as well — and help the company expand its reach by bringing more partners onto the platform.
Summer was founded in 2017 and has raised $12.3 million to date.
