Stride Takes Measures To Turn Student Financing Upside Down by Focusing on The Future Rather Than The Past

If you’re attempting to secure a mortgage or a car loan, banks will dig into your background with their judgement glasses on. It makes sense; it’s a fairly dependable indicator of whether or not you’ll be able to repay your debts. It’s a little different when it comes to student loans. Sure, your past influences your ability to repay, but for many types of schooling, obtaining a degree changes your earning potential, and hence your ability to repay. Stride Funding, which believes that present student loan processes perpetuate the rich-get-richer system, is taking an alternative way and has just raised $12 million to assist it take the company forward.

The company’s core issue is one of equality and access to education, which is one of the most important markers of whether or not someone will be able to advance financially. As you might guess, there are levels of privilege (can your parents assist you pay off your student loans?) and institutionalized racism in play. Stride Funding is taking on the $130 billion student loan sector, which has $1.6 trillion in outstanding loans, with a quixotic optimism.

Stride has raised its cash committed to students to over $50 million since closing its seed round in 2019, with financial providers such as Silicon Valley Bank aiming to finance hundreds of millions of dollars more.

The company’s major goal is to make education more accessible to all people, especially those who have previously had difficulty obtaining funding.

“There’s this tremendous divide in terms of access to finance, especially in student financing,” says Tess Michaels, CEO and creator of Stride Capital. “Only around a fourth of students have access to private loans because 92% of them demand co-signers.”

Firework Ventures led a $12 million Series A fundraising round for the startup today (co-founded by Brigette Lau and Ashley Bittner). Impact investors such as Juvo Ventures and Graham Holdings, as well as former investors GSV Ventures, Slow Ventures, and Sinai Ventures, are among the other investors. At the basis of its business, the Stride Funding team has a personal mission:

“Education was their ticket to economic advancement for both of my parents when they emigrated to the United States. Education is the key to unlocking doors. And, regrettably, I believe that a lot of people, particularly marginalized communities, are just shut out of the market,” Michaels adds, emphasizing how this disparity exacerbates the divide between the haves and the have-nots. “I’m highly committed to the mission.” We’ve helped a diverse group of students, ranging from refugees to DACA recipients, women, and underrepresented minorities, to name a few. We get such positive tales from students all the time, and it just confirms that this is a worthwhile endeavor.”