Pillar Launches With $5.5M in Seed to Solve Student Loan Crisis
Pillar, the easiest and most effective way for people to manage, pay off, and save money on their student loans, has launched. Early users have already linked over $50M worth of student loans into the platform which automates and manages the loan repayment process for people. Pillar is backed by $5.5M in seed funding which was led by Kleiner Perkins, with additional participation from Rainfall Ventures, Great Oaks VC, Financial Venture Studio, Kairos, Red Dog Capital, and Day One Ventures. Individual investors include Adam Nash; the former CEO of Wealthfront and Acorns board member, Noah Weiss; former SVP of Product at Foursquare, Zach Weinberg and Nat Turner; co-founders of Flatiron Health, Misha Esipov; CEO and co-founder of Nova Credit, and Robinhood’s Head of Growth, Patrick Kavanagh, and Head of Finance, Nadia Asoyan.
Student loan debt is the second largest type of consumer debt with 45M borrowers in the United States owing more than $1.5 trillion in student loans. 7 out of 10 students take out loans to pay for college and the average person graduates school with $30,000 in debt, needing 20 years to pay it off. For those with at least $60,000 in debt, it takes more than 30 years on average to pay it off and nearly 20% of borrowers owe more than $100,000 after graduation. Student loan debt also impacts the economy and harms wealth creation opportunities in America. 83% of people ages 22 to 35 with student debt blame their student loans as the reason they haven’t bought a house yet.
Women, who own two-thirds of all student loan debt, are disproportionately impacted due to the gender pay gap. Women borrow more and earn less, which results in them needing two extra years to pay off their loans.
With Pillar, paying off student loans has never been easier. The platform starts by aggregating all of a borrower’s student loans into one place. It then analyzes their loans, income, and spending to determine the fastest way to pay down their debt. Pillar then automates the payment and management process, making it easy for people to take action and pay off their debt faster. It solves pain-points inherent to managing student loans, creating a positive impact on borrowers and helping them get out of debt faster. The average borrower on Pillar will save $6,200 and four years on repayment.
One of the key issues for borrowers is that student loan lenders are financially incentivized to keep people in debt longer, which means people get thousands of dollars deeper into debt than they need to. People can put their confidence in Pillar because the platform isn’t a student loan provider or refinancer, meaning it doesn’t make money from charging interest on student loans. It only takes two minutes to sign up with Pillar, and it is completely free to download and use. Later in 2019, Pillar will introduce premium features that people can choose to access.
“Last year my wife graduated from law school with over $300k of student loans. I was at Stanford Business School, where I planned to take on another $250,000 of debt. We spent weeks researching how we were going to pay our loans back, but struggled to find a way that was right for our unique financial situation and goals. I experienced the same problem that millions of other borrowers face each day. I saw how the student loan debt crisis is one of the biggest challenges facing our country, so I dropped out of Stanford to help solve it.” – CEO and cofounder of Pillar Michael Bloch.
On Pillar, people can make in-app payments and are regularly updated on new ways to save money so they can pay off their loans more effectively. Pillar also shows people how much money they’ll save over time if they make specified payments now or in the near term, and if they can afford to increase or decrease their payments.
