How It Works:
Step #1: Tell Us About Yourself
Unlike traditional loans, we’re more interested in you than in your (or your parents') ﬁnances. Your personality, experiences, grades, and goals are the things that are important to us: we use this information to determine your rates.Get a Quote Learn More
Step #2: Get an Offer
We'll offer you a loan, but with a twist: instead of asking you to pay back a specific amount, we will ask you to pay a percentage of what you make in the future. This ensures that you're only paying an amount you can afford, IF you can afford it.Get a Quote Learn More
Benefits For You
If You Can’t Afford It, You Don’t Pay
Can’t ﬁnd a job? Want to go to graduate school or do volunteer work? Want to start your own business or pursue your dream of being a writer? No problem. If you make under a certain amount of money, you don’t pay anything. And if you happen to make a ton of money ? We’ll actually put a cap on the maximum amount of money you’d have to pay us. There really isn’t any risk on you.
How Much the Loan “Costs” Depends on You.
With this model, your hard work and talent gets rewarded, not how much money you (or your relatives) have. If your grades and test scores are good and you’re a hard worker, we can charge you less for your loan. The same goes if you attend a more selective school or graduate with a higher-paying major.
We Only Get Paid if You Get Paid.
Traditional loan companies don’t care much about your success: they’ll get their money one way or another. But we’re different: we want you to succeed – not only because we’re nice (which we are), but because the more you get paid, the more we get paid (to a point – remember the cap.) This means we want to provide you with all the resources you need to be successful in school, in your career, and your life. It can truly be win-win.
"Education is the most powerful weapon which you can use to change the world" -Nelson Mandela
So What’s the Catch?
Sounds too good to be true? In fact, there is a catch, and we’re actually going to tell you what it is:
If you are highly successful, you may end up paying more money than with a traditional loan…but only later in your career, and only if you can afford it.
“Why would I ever want to put myself in a situation where I might end up paying more money than I have to?” But there are good reasons why you might want to – in fact people do it all the time already for two reasons:StudentSmart™ loans are sort like insurance: because you won’t have to pay if you get can’t work or don’t earn much money, it protects you in case something bad happens.
1. Insurance. Most people (likely including your parents) have different insurance policies: health insurance, auto insurance, and property insurance (on your home) are just a few examples. Let’s take a specific example with health insurance. Here’s how it works: every month, you would pay some amount of money – let’s say $100 – to the insurance company. You pay this amount every month whether you’re sick or healthy. Why would you this? Because, in exchange, if something really bad happens (you get really sick, or in an accident, for example), the insurance company promises to pay a significant percentage of all your medical bills. For many people who thankfully never need to use their insurance in a big way, you might argue that this was a waste of money – after all, they spent $100 a month, and never got anything for it! However, because medical bills in a serious accident or illness can easily be very expensive (tens or even thousands of dollars), many people are willing to pay some amount each month (even though they don’t “have” to) to protect them in case something bad happens. In other words, they pay something when they can afford it to avoid having to pay in a situation where they can’t.
StudentSmart™ loans are sort of like insurance: because you won’t have to pay if you get can’t work or don’t earn much money, it protects you in case something bad happens, and in exchange, you may end up paying a bit more if you’re successful. In other words, you pay something when you can afford it to avoid having to pay in a situation where you can’t. (And actually, in some ways StudentSmart™ loans are actually better than insurance: with insurance, you have to pay every month no matter what; in this case, you only paid if you can afford it).
|What Happens If...||Traditional Loan||StudentSmart™ Loan|
|You Don't Graduate||You Pay||NO Payments|
|You Can't Find a Job||You Pay||NO Payments|
|You Get Sick or Injured and Can't Work||You Pay||NO Payments|
|You Get Laid Off / Fired||You Pay||NO Payments|
|You Make Less Than Other People "Like You"||You Pay||You Pay LESS
|You Make More Than People Like You||You Pay||You Pay Slightly More
(When you can afford it)
|You Make WAY More than People Like You||You Pay||You Pay Slightly More
(When you can afford it)
2. Alignment of incentives. Imagine you want to buy a used car. You start by looking on Craigslist or perhaps going to a dealer and looking at cars you might want to buy. After some searching, you find one you like at a nearby dealer, and arrange a time for you to take look. When you get to the dealer, do you think that the car dealer is trying to do what’s best for you….or what’s best for them?
The answer’s pretty obvious, and so is the reason why: you want to find the car you want at the best possible price, and the dealer…well, they want to make money! This is what’s know as a misalignment of incentives: what’s good for one party (you) isn’t the same as what’s good for the other party (the dealer).
Now, imagine that you went to another dealer, but with a difference: this dealer told you that he was so sure he was giving you a good deal, that if you found the same car at a lower price, he would pay you the difference out of his own pocket. Sounds pretty good, right? See, now you can be pretty sure that you’re getting a good deal, because his incentives are aligned with yours – you both want this deal to be the lowest price car. This same kind of thinking is the reason many companies offer their employees stock options: by giving employees ownership in the company, both the employees and the shareholders of the company have the same incentives: to make the company successful.
StudentSmart™ loans align our incentives in exactly the same way. Traditional loan companies don’t care if you’re successful or not, because they know that they’ll get the same amount of money from you – no matter what. We only get paid if you get paid, so – unlike other lenders – our incentives are exactly aligned to help make you successful.
With StudentSmart™ loans, however, we only get paid if you get paid – our incentives are exactly aligned to help make you successful. We’re willing to take the risk with you and put our and our investors’ money on the line that we can help you be successful. Therefore, we’re going to do everything in our power – whether access to materials, mentors, coaches, networking opportunities, resume help, and much, much more, to make sure you are successful in whatever you want to do.
Why do we tell you all this? Because too often, lenders and other financial institutions use difficult-to-understand language and terms to hide the costs and risks of what they’re selling you. We’ll always be open and honest with you, every step of the way.