Stride: Revolutionizing Student Finance

Rethinking Student Loan Access: Stride Funding's New Approach

When applying for financial products like mortgages or auto loans, lenders thoroughly examine an applicant’s financial history. This practice is logical, as past behavior often predicts future repayment ability. However, student financing operates with a slightly different framework. While past credit history is considered, the potential for increased earnings with a degree significantly impacts an individual’s capacity to repay.

Addressing Inequality in Education Financing

Stride Funding is challenging conventional student loan systems, believing they often favor those already financially secure. The company recently secured $12 million in funding to further its mission of expanding access to education. This investment will allow Stride Funding to advance its innovative approach to student loans.

The core issue Stride Funding addresses is equality and access to education – a crucial factor in determining financial mobility. Systemic barriers, including privilege and institutionalized racism, significantly influence a student’s ability to secure funding.

Stride Funding is ambitiously tackling the $130 billion student loan industry, which currently holds $1.6 trillion in outstanding debt.

Growth and Investment

Since its initial seed funding round in 2019, Stride Funding has committed over $50 million in capital to students. Financial institutions like Silicon Valley Bank are actively seeking to provide hundreds of millions more in funding.

The company’s primary goal is to broaden access to education, particularly for communities historically underserved by traditional lending practices.

The Need for Alternative Lending

“There’s a substantial disparity in access to capital, especially within student lending,” explains Tess Michaels, CEO and founder of Stride Capital. “A staggering 92% of private loans necessitate a co-signer, yet fewer than 25% of students have access to one.”

Series A Funding and Future Plans

Stride Funding announced the successful completion of a $12 million Series A financing round. Firework Ventures, led by Brigette Lau and Ashley Bittner, spearheaded the investment.

Additional investors include Juvo Ventures and Graham Holdings, alongside existing investors GSV Ventures, Slow Ventures, and Sinai Ventures.

A Mission-Driven Approach

The Stride Funding team is deeply committed to its core mission:

“My parents immigrated to the United States, and education was their pathway to economic advancement,” Michaels shares. “Education unlocks opportunities, but unfortunately, many – particularly underrepresented groups – are excluded from the market.”

Michaels emphasizes the importance of their work, stating, “I am strongly connected to this mission. We’ve supported a diverse range of inspiring students, including refugees, DACA students, women, and underrepresented minorities. The encouraging stories we receive from students constantly reinforce the value of what we do.”