Fallout from this issue is multi-faceted. Rohit Chopra of the Consumer Financial Protection Bureau identifies a link between student debt and the slow recovery of the housing market: “First-time home-buyers are a substantial part of the housing market . . . Instead of saving for a down payment, these borrowers are sending big payments every month.”
Several companies have merged from the startup sphere to challenge this issue, among them Tution.io, LoanLook, and Student Loan Hero. I recently had the privilege of interviewing Andrew Josuweit, the founder of Student Loan Hero, for our weekly online television program, FurtherEd TV, along with Jessica Brondo of Admitted.ly, which gamifies the role of the college guidance counselor.
As is often the case with the startups I encounter, Student Loan Hero offers a service that emerged from a personal need. “Ever since I graduated from college in 2009, I’ve been followed by personal loan debt,” Josuweit remarks in a recent TechCrunch article. “I graduated with $104,000 in student loans, across 16 loans from four different banks. . . my banks and my college weren’t really providing me with financial strategy to get out of debt faster … it was a nightmare, to be honest.”
The underlying concept is simple: Student Loan Hero consolidates all loans into a single dashboard, and allows debtors to see how much of their payments go to principal and how much go to interest, an often-muddled distinction. It also helps users identify savings by running amortization schedules, and helps users identify government programs for which they might be eligible.
When in the course of my interview with Mr. Josuweit I inquired as to his goals for the future, he replied, “It’s not just about student debt, but how do we get somebody set up so when they walk out of college, they have the right bank accounts, they’re looking into an IRA, a 401K . . . Financial advisers aren’t talking to young people, and I think somebody needs to.”