December 3, 2015 By Joe DePaulo
Why I Started the Business – One Year Later
This week marks the one-year anniversary of College Ave Student Loans. So I thought this was a good time to tell the back story about our new company.
About a year and a half ago, I departed corporate America for the second time in my career. I had spent the last five years working for a giant student loan company, and I had to make a decision – stay in this industry, or return to one of the other businesses where I had worked earlier in my career.
I decided to stay in the student loan industry because I saw an opportunity to give consumers something better. There are many reasons why going to college is such a big decision and paying for college can be so daunting. But there is no reason why borrowing cannot be simple and clear.
I got together with a few folks – our eventual COO Tim Staley and our eventual CMO Jen Astle, among others – and talked about what we needed to do if we were going to make a go of it. I knew both Tim and Jen for years, and we worked together and often shook our heads at what we saw.
Even though the student experience is diverse and changing, the student loan industry is one-size-fits-all. It doesn’t matter whether you’re in a four-year program or a one-year program. It doesn’t matter whether you are an undergrad or a graduate student. It doesn’t matter if you are going to college right after high school or returning later in life. You get the same product that was offered to students in the 1970s. But it leaves you with the indebtedness of 2015. A bad combination!
You also have to put up with a complicated process to get a loan. It takes forever, and you have no idea what it really costs to borrow. You just have a rate and some clumsy disclosures. Meanwhile, technology is changing everything from how we share rides to how we order pizza, but student loan companies still send you through a process that seems detached from what is going on in the rest of the world. Many of our student borrowers do not know any world other than the one with technology at their fingertips.
Our goals were simple. Make it easy to apply for a loan – we have a pre-qualification tool in case you want to check us out before you apply. Make it clear what it costs – we have a calculator to show you exactly what the loan costs. Make it easy to customize the loan to fit your needs so once you understand the cost, you can control it – you can choose rate, payment type, and term, and you can see how each decision impacts your total cost.
So far our students seem to really like this. In just a few short months, more than 80,000 people have applied for our loans. They use our calculators. They use our prequalification tool. And so do their parents.
We have a long way to go, but we’re proud of what we’re delivering, and we’re having fun doing it. As we move into our second year, we will continue to focus on making the borrowing experience as simple and clear as possible, and we will make sure that promise carries through managing and repaying the loan.
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