I don’t want to be hyperbolic or hysterical (even though I’d like to be), but the student loan situation in this country is awful. The number of students who default on their student loans continues to increase, and has doubled in the last six years. More than two-thirds of students graduating from colleges and universities borrow money — with an average of more than $23,000 of debt. (And one-in-ten graduate with more than $40K in debt.)
Earlier this year, Peter Thiel (the Paypal co-founder and well-known hedge fund manager and venture capitalist) predicted that the next big bubble the country faces is not in tech, housing, or finance — but higher education. Whether or not one agrees, there’s really no doubt that a new focus on the costs of education and the growing burden of student debt (and loan default) is long overdue.
This is the thinking employed by Brendon McQueen, who is today launching in private beta a web platform called Binksty that aims to give students a comprehensive one-stop shop to manage loans, pay off debt, as well as educate them on the best ways to save money.
For those familiar with the current web landscape, there are some other awesome companies tackling this problem, like Edulender (now Alltuition), Simpletuition, Fynanz, and PeerTransfer, all of which are tackling specific aspects of the student loan life span — namely, finding and supplying loans and making international education payments easier.
Binksty, on the other hand, wants to go one step further, aiming to facilitate the student loan process from filling out FAFSA paperwork and finding the right loan to organizing and paying off said loans. According to McQueen, the startup is currently in discussions with lenders (who, as mentioned above, are facing the highest default rates in years) to create a mutually beneficial solution that will help curb defaults by offering students a simple way to view their loans and find an alternatives to default, ramp up sales via the startup’s loan marketplace, and cut back on the lender’s customer service costs by way of Binksty’s automation process.
McQueen, who himself graduated from Columbia with 12 loans and over $100k in debt, knows that the goal isn’t easy to achieve, but the value proposition is enormous: “What we’re doing is saving students and graduates time and money while working with the lenders to streamline the entire process so that everybody wins”, he says.
Thus, the startup’s revenue streams are part of the very process of saving students money, since they’re already burdened with debt. For example, loan aggregation on Binksty is entirely free, while features like prepared tax documents will come at a small price. (Though McQueen assured me that the costs of these features will remain competitive — and below — with that of its competitors.)
The startup is also putting together an algorithm that will help students better manage a series of loans, so that, for example, when they enter their loan information, the platform will tell them that loan 1, 2, and 5 are qualified for repayment. Or that consolidation is an option and that if they do choose to consolidate, Binksty will tell them what the plusses and minuses are of doing so. Pretty cool.
An all-in-one service that lets students gather their (multiple) loans online, analyze their debt, set reminders for payment, etc., and realize financial goals while saving money obviously has great appeal for students and graduates alike, many of whom continue paying off debt through their twenties. If Binksty can bring on a wide array of lenders, its value will be two-fold.
The startup currently counts Ophir Tanz, Co-Founder and CEO of GumGum, as well as John Weir (CEO Planning for College), and David Harmon (President and CEO of Education Loan Servicing Corporation) as members of its advisory board. Oh, and we’ve also heard word that the startup has raised the interest of a high-powered director at one of Silicon Valley’s most well-known companies. We can’t say who, but let’s just say, the startup is attracting some great advising talent.
For readers interested in receiving early access to Binksty, navigate over to the sign up page here and enter this code: De.1r5ieZ.
And for a multimedia introduction, check out the video below: