Last year, 44 million Americans held $1.4 trillion in student loan debt, placing traditional forms of “adulting” like investing in retirement and purchasing real estate way out of reach for many.
To help employees carrying a load of student loan debt, one Austin startup has leveraged the rising popularity of work perks, creating a way for employers to sponsor student loan repayments. On Wednesday, investors joined that cause by fueling $3.5 million into Student Loan Genius’s repayment platform.
Vestigo Ventures, a VC firm that funds early-stage fintech startups, led the seed round, which also included participation from MFG Ventures, Prudential Financial and Rubicon Venture Capital.
This new funding validates Student Loan Genius’ mission and efforts to enable companies to retain their top talent.”
Student Loan Genius will direct the new capital toward commercialization efforts and toward hiring efforts in development, marketing and sales.
“This new funding validates Student Loan Genius’ mission and efforts to enable companies to retain their top talent in an increasingly competitive workforce through unique benefits, like student loan payments, that meet their employee’s needs,” said CEO Matt Beecher, in a statement.
Student Loan Genius' employee benefits platform gives employers the opportunity to monetarily contribute to employee student loan debt, much like a 401(k) matching plan. This approach to work perks has attracted major clients including New York Life, Ralph Lauren, Pinterest and Mastercard.
“SLG is driving innovation in employee benefits that hasn’t been seen since the emergence of the 401(k) decades ago,” said Michael Nugent, Vestigo Ventures managing director, in a statement. “With 70 percent of the emerging workforce saddled with student loans, it is incumbent on employers to empower the current and future workforce generations to succeed in the market, unencumbered by the high cost and burden of debt.”
Student Loan Genius launched in 2013 and graduated from Capital Factory’s Austin accelerator program in 2014. It previously raised $3 million in February 2016 from Prudential affiliate Gibraltar Ventures, Kapor Capital, Capital Factory, Village Capital and an affiliate of John Hancock/Manulife.