Innovation

Plaid Calls For Startups To Help Tackle $1.6T Student Debt Balance

Student Loans

In its third annual Request for Startups, Plaid is aiming to focus on student debt management along with other areas of financial services that FinTech has underserviced. The firm notes that the total amount of student debt in the United States is at a record high of $1.6 trillion, the average outstanding debt for those who owed was between $20,000 and $25,000 in the last year, and, for those paying off their own student loans, two in 10 adults are behind on these payments. the company noted.

The company said in a blog post, “There is significant opportunity for startups to innovate in a way that helps improve the lives of student loan borrowers. We’re particularly excited about the ideas listed below, which represent several underserved areas of student loan management, and includes a few other ideas in the broader realm of financial services, where we believe new and improved products could make a major impact on consumers.”

One of the ideas the company is listed is the big picture of debt. As it stands, there is not a good way for borrowers to look at their entire financial picture in a single location. “Today, you can see your checking, savings, and investing accounts together, but the missing puzzle piece is debt: credit cards, personal loans, student loans, auto loans, and mortgages,” the company said, noting that this consolidation would help those with student loans keep up with managing different types of debt. 

The company also favors ideas around automated debt paydown. It noted that it is important to help students understand how student loans work. The next step, it said, is to make tools for them to make the correct decision as to the timing for paying off their debt. A “tool that helps them ingest information about their debt (whether it’s student loans, personal loans, or even monthly utility bills), does the math about the right order in which to pay them off, and automatically pulls the right amount out of each paycheck to make the monthly payment would be hugely impactful.” 

Plaid is also supports the idea of a next generation student loan servicing platforms and a student-centric debt collection agency. It is also excited about last-mile remittance, cross vertical financial infrastructure, digitizing government benefits and compliance-as-a-service. And it notes that “for select companies new to Plaid, we’ll be looking to grant up to $12k in free usage to get started. Let us know at rfs@plaid.com.”

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