Student loan debt is growing along with tuition costs, and as some borrower’s report struggling to keep up with their repayments, tech companies that specialize in finance are moving into the field with innovative solutions. Whether they make the process of applying easier in the first place, offer nontraditional algorithms for refinancing or explore alternative ways to pay off borrowed money, these companies are changing the student loan landscape. They recognize the challenges faced by those heading off to college as well as graduates, and they are designing products and services to respond to those challenges.
New Lending Options
Completing the Free Application For Federal Student Aid is much easier than in the past. It is available online and accessible using mobile devices, and whereas applicants using a paper form must work through dozens of questions, skip logic technology has made the process easier and more streamlined for those who are completing it on computers, tablets or phones. For students who learn that they do not qualify for federal assistance after filling out the FAFSA or who need additional financial help, borrowing from private lenders no longer means having to visit a bank or credit union in person and fill out paperwork.
While they still offer loans and maybe the right option for some, students are no longer limited to these institutions. The number of online lenders continues to increase, and their algorithms may differ from those of traditional financial institutions, widening their base of borrowers. Factors such as the school attended and projected future earnings are among those taken into account by some companies. More customization for loans is available as well. With some online lenders, applicants may wait just a day or two or even a few minutes to find out whether they are eligible.
There are a number of tools to help people compare offers on loans for higher education. Most are limited in the lenders they show, so it may be best to use a few different ones. Those who have graduated and who are considering refinancing can use a student loan calculator to determine what the savings will be. This can help in choosing the plan with the most advantages based on the goals and financial situation.
Revamped Refinancing and Repayment
Graduates have far more options for repaying or refinancing than in the past. Rather than requiring a high credit score and a flawless repayment record in order to refinance, some platforms specifically target individuals who have fallen behind on their payments. Like some of the online lenders, they often use different criteria, including the school, attended, subject studied, and patterns of savings in order to determine creditworthiness. Companies are also moving from other types such as mortgage refinancing, into student loan refinancing using blockchain technology to streamline the application process. Repayment options are expanding as well. Some fintech companies work directly with graduates to help them with financial literacy and debt management while others partner with employers to repay a portion of the individual’s student loans.