Candidly picks up student debt relief where new US policies leave off

Student indebtedness alleviation has been a basking taxable for years now, pinch immoderate large things happening — policy-wise — successful nan past year: Last summer, nan Biden management announced a scheme to cancel up to $20,000 for group holding national student loans.

Then successful December, Congress passed nan SECURE ACT 2.0, which created provisions for employers to lucifer student indebtedness payments for those pinch indebtedness while besides adding to status accounts. Late successful February, nan Supreme Court heard arguments related to a suit trying to artifact Biden’s indebtedness alleviation program.

There has been a now three-year region connected national student indebtedness payments owed to nan world pandemic, and it’s wide known that astir 47 cardinal student indebtedness borrowers beryllium astir $1.8 trillion.

That, mixed pinch nan truth that a majority of Americans don’t person $500 to screen unexpected expenses, has provided an “in” for fintech companies to create galore exertion approaches to solving nan student indebtedness problem.

While some fintech companies person taken nan borrower approach, others are looking astatine it from an worker use position and attracting liking from task superior investors. Those see Goodly, Highway Benefits, which announced $3.1 cardinal successful seed backing past week, and Candidly, which announced $20.5 cardinal successful Series B backing today.

Candidly, antecedently known arsenic FutureFuel, partners pinch entities, including employers, financial institutions, status and wealthiness guidance firms, to embed artificial intelligence-driven student indebtedness and savings optimization products into worker benefits engines.

“We beryllium to crush debt, and to empower hard-working Americans to spell beyond student debt, into wellness, and yet wealth,” said Laurel Taylor, laminitis and CEO of Candidly, successful an interview. “More specifically, astir who person student indebtedness are focused connected achieving state from indebtedness astatine nan disbursal of building wealth. Our ngo and our capabilities alteration users to make simultaneous advancement truthful that we don’t person to take betwixt our past and our early erstwhile it comes to financial wellness and wellness.”

Altos Ventures led nan caller financing and was joined by existing investor Cercano Management. In total, Candidly has raised $57 million.

The Series B financing follows a twelvemonth of grounds maturation successful which nan institution saw 10x gross maturation and a 3,600% summation successful payments flowing done nan Candidly platform, Taylor said.

Candidly is earmarking immoderate of nan caller backing to proceed operationalize nan advancement of nan SECURE Act 2.0, which was up for a ballot successful Congress. The institution is processing a suite of devices that let employers to lucifer employees’ student indebtedness payments, emergency savings contributions and tax-advantaged status contributions.

On nan borrower side, location are besides nationalist work indebtedness forgiveness devices and Federal Forgiveness Finder to amended entree national student indebtedness alleviation programs. Borrowers who person utilized Candidly’s gamified repayment and auto-payment devices were capable to nonstop an mean of $45 successful other payments to their loans each month, Taylor said.

In addition, 2022 was a large twelvemonth for nan institution pinch respect to distribution partners, including Guild, Empower, Lincoln Financial Group and Vanguard, joining existing partners for illustration UBS and Fiserv, which Taylor said enables Candidly to service complete 35 cardinal Americans.

In February, nan institution announced that its customer, American Eagle Outfitters, utilized Candidly to thief labor salary down much than $100,000 successful student indebtedness debt.

While nan institution is capable to shave years disconnected of indebtedness payments and thief a customer nary longer miss retired connected savings and retirement, Candidly tin besides service arsenic a spread filler should nan Biden administration’s one-time discharge for student indebtedness beryllium allowed to progress, aliases moreover if it doesn’t.

“The one-time discharge isn’t a painkiller, but it whitethorn beryllium a vitamin,” Taylor said. “It helps a small bit, but there’s still a large magnitude of indebtedness to slog done for nan mean American successful our workforce today. The logic we raised this information was to standard our expertise to toggle shape financial outcomes for nan users that we serve, for nan employers that are providing america arsenic a use and for nan channels that are distributing us.”