If you’re trying to get a mortgage or an auto loan, banks will spec their judgment and look at your past. makes sense; It is a reliable indicator of whether you will be able to repay your loans or not. Student financing is a little different. Sure, your past plays a role, but for a lot of education, having a degree dramatically changes your earning potential, and therefore your ability to repay. With the philosophy that the current student loan system perpetuates the rich-to-riches system, stride funding is taking a different approach and has just raised $12 million to help the business take a few more steps into the future.
At the heart of the company is the issue of equality and access to education – one of the most important indicators of whether one will have the opportunity for financial upward mobility. As you might expect, there are layers of privilege (can your parents help pay for your loans) and — notably — institutional racism in the picture. It’s with quirky optimism that Stride funding is taking on the $130 billion student loan industry, which currently has $1.6 trillion worth of loans outstanding.
Since closing its seed round in 2019, Stride has raised more than $50 million in committed capital for students, with capital providers such as Silicon Valley Bank seeking hundreds of millions of additional funding. The main thrust behind the company is to make education more available. , especially for populations that have traditionally struggled to secure financing.
“It’s a huge difference in access to capital, especially in student loans,” says Tess Michaels, Stride Capital’s CEO and founder. “Ninety-nine percent of private loans require co-signers, and less than a quarter of students actually have access.”
The company today announced that it has closed a $12 million Series A financing led by Fireworks Enterprise (Co-founded by Brigitte Lau and Ashley Bittner). Other investors include impact investors such as Juvo Ventures And Graham Holdings – With previous investors GSV Ventures, Slow Ventures and Sinai Ventures. The Stride Funding team has a personal mission at the core of its business:
“Both of my parents immigrated here to the states, and education was their way of economic mobility. Education only opens the door. And unfortunately for a lot of historical reasons, I think a lot of people, especially under-represented populations, are left out of the market,” Michael says, highlighting how this gap exists between the rich and the disadvantaged. further widens the gap between “I feel very tied to the mission. We have supported such a wide range of really, really amazing, 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 just reinforces that this is something that is worth doing. ,