Student loan debt reached $1 trillion in March 2012. An increase in college-bound students, tuition hikes and a slowly-recovering job market have led to record levels of debts for Americans youngest generation of workers.
Into that environment steps Student Loan Hero: a company looking to serve as the Superman to the Lex Luthor that is loans.
The so-called “Mint for student loans,” as TechCrunch has deemed, Student Loan Hero joins a crowded group of competitors such as Tuition.io, LoanLook and ReadyForZero, looking to help young people find the best ways to shed their enormous debt.
According to TechCrunch, Student Loan Hero was founded from personal need by co-founder Andrew Josuweit, who said he’s been plagued by personal loan debt since graduating from college in 2009 and resorted to creating an Excel spreadsheet to organize and sort through his loans.
“I graduated with $104,000 in student loans, across 16 loans from four different banks,” he said. “My banks and my college weren’t really providing me with financial strategy to get out of debt faster, so in the spreadsheet I was running financial calculations…it was a nightmare, to be honest.”
According to Josuweit, Student Loan Hero has an average user $52,000 in debt and can save that person around $5,000 if they apply an extra $100 per month towards their loans. His company asks for banking and loan information upon sign-up, then determines which programs fit best for each user, drawing partially from a pool of 30 programs for public loans which few users even know exists.
Launched as a public beta app in October, the company recently raised a modest $25,000 from Expansion VC but has previously netted $40,000 from Startup Chile and an undisclosed amount (believed to be between $15,000-$20,000, according to TechCrunch) from Socratic Labs.
What do you think? If you’re still in student loan debt, would you consider using a program such as Student Loan Hero? Would you recommend such a program for your children? Let us know in the comments below.