Ask any recent college graduate what their main financial worry is, and they will probably tell you that it’s their student loans. According to Experian, there is close to $1.5 trillion in combined student loan debt across the United States.
There are companies that have programs for student loan forgiveness. However, for graduates working in small-to-medium sized businesses, this may not be an option for them.
Luckily for students entering the workforce, FutureFuel.io is creating software to make student loan refinancing and repayment a benefit that SMBs can offer their recently-graduated employees.
Founder and CEO Laurel Taylor has direct experience with the hassle of repaying loans.
“I believe you have to live it before you can lead it. For my undergrad, I went to Texas State University,” said Taylor. “My parents and I took out loans to fund my education, and I never questioned it - it’s just what 45 million of us Americans do in order to go to college.”
After graduating, Taylor began a long-running career in tech, including working for Google. She also fulfilled a lifelong dream of hers: attending MIT.
It was also during her time attending graduate school when she decided to take the plunge and become a first-time entrepreneur. “When I was at MIT, it was Bill Aulet who exposed me to the school’s entrepreneurship program,” Taylor said.
Similar to student-led startups from MIT’s entrepreneurship program, Taylor wanted to solve the issue of ever-increasing student loan debt for two main parties: recent graduates who are entering the workforce to parents who are taking out Parent PLUS Loans to cover the gap. She did some research and found statistics that supported her own experience of paying down debt.
“Student loan debt impacts every decision our emerging workforce makes - where they work, how many roommates they have, and when they believe they can start saving - which is years behind their debt-free peers,” Taylor said. “Millennials are facing 15 to 20 years of monthly payments averaging $500 a month. Not surprisingly, student loan debt is their #1 stress.”
In 2016, the company was founded, and their product went into development. Taylor’s experience in technology led her to create a mobile-first interface designed to be transparent to its users. She bootstrapped and built her first prototype, before raising her first round and scaling the team. Taylor and her first teammate, Director of Product and Operations Kristen Tyrrell, traveled across the US, meeting thousands of students to better understand just how meaningful this new benefit would be to future employees.
FutureFuel.io offers their clients an enterprise SaaS platform. A user inputs their student loan information, and the platform pulls the data on loans from the lenders. From there, the company using FutureFuel.io can start figuring out how to refinance an employee’s loans, or find out what a good repayment amount would be. On average, their multi-lender refinancing marketplace reduces the user’s interest rate by 1.7% and saves the user $19,000 across the life of their loan.
Currently, FutureFuel.io’s clients include SMBs and startups, including Afiniti, Mashable, SmarterHQ, and ZappRx, all of whom are offering to refinance as the core of the benefit. The company is in discussions with 100+ Fortune 500 companies.
The ultimate goal of the company is for its clients is to retain talent. In a hypothetical situation, one well-performing employee may have to jump from job to job in order to keep up with student loan payments. For some students, their loan’s interest rates could only make older loans increasingly cumbersome to pay.
“There is incentive alignment in repaying and refinancing student loans,” Taylor said. “Employers offering this benefit show empathy for their employees. Employees feel their employer genuinely cares, and that inspires fierce loyalty.”
She added, “Loyalty means retention for employers, which means lower attrition costs for the employer. It’s a win-win-win.”
Companies who want to keep their exceptionally talented employees may want to look into a solution like FutureFuel.io. Adding an extra benefit of student loan repayment and refinancing could be the secret sauce to low turnover a company needs. Not to mention, it alleviates a student’s anxieties when it comes to student loans.