Austin-based Skills Fund closed an $11.5 million seed funding round today, enabling it to proceed on its mission to reengineer student loans.
For those of us with student loan debt, the Skills Fund manifesto is irresistible. They think student loans should work like investments, where all the players have skin in the game.
The Skills Fund mission sounds simple — to make student loans more fair to students. But it’ll be a long fight, based on the trillions of dollars of student loan debt the Consumer Finance Protection Bureau estimates is outstanding in the U.S. today.
That’s why Skills Fund is being picky in its partners. It’s focusing on bootcamps that teach skills in coding and data science programs, and has a robust process for assessing the quality and outcomes of each.
So far, that’s led to partnerships with Dev Bootcamp, Metis, Hackbright Academy, CodeU, Sabio and Galvanize.
“The only way to guarantee successful student outcomes is for all stakeholders – lenders, accelerated learning programs, and quality assurance entities – to share in the risk when students invest their time and money in education,” founder and CEO Rick O’Donnell said in a statement.
And if anyone knows, it’s O’Donnell. Before starting Skills Fund, he was the chief of all of Colorado’s consumer protection agencies and later served as Colorado’s Secretary of Higher Education. He's currently on a federal advisory committee overseeing college accreditation agencies.
The funding was provided by Iowa Student Loan, a nonprofit with $2.6 billion in student loans. Its subsidiary, Aspire Resources Inc. will provide customer service for Skills Fund loans.
Jim Deters, CEO and co-founder of Galvanize said working with Skills Fund will help offer tech training to a diverse student population.
“Our mission at Galvanize is to provide learners of all backgrounds with access to new skills and amazing job opportunities,” he said in a statement. “Our new partnership with Skills Fund provides Galvanize students with a simple, hassle-free way to fund their education.”