NYC-based CommonBond announced today that it has expanded its student loan consolidation and low-cost refinancing program to graduates of law, medical, and engineering programs, as well as to additional MBA programs at Vanderbilt University, Washington University in St. Louis, and University of Texas. This expansion by the graduate student lending platform follows the goals it set after raising $100 million last September.
“Our mission is to provide a low-cost, high-impact student loan experience,” said David Klein, cofounder and CEO of CommonBond, in a statement. With this announcement, CommonBond’s student loan refinancing program will expand from 25 MBA programs to now over 100 graduate degree programs. “We are now lowering monthly payments for even more students and graduates and will have saved our 2014 borrowers as much as $10 million in aggregate interest payments over the life of their loan.”
CommonBond has gained a lot of attention due to its focus on providing students with lower loan rates than the federal government. The company does this by working with individual investors – particularly, alumni of various graduate programs – who genuinely want to support grad students, and then channeling those funds into low-cost loans. Graduate student lending is a large market; originally only available to MBA students, the expansion to include law, medical, and engineering school graduates will provide the company with others desperate for financial support. In 2012, the average debt for law school graduates was $108,294, while the average debt for med school graduates was $166,750.
Aside from the financial benefits, CommonBond aims to develop unique bonds between investors and borrowers, and create a community for all beneficiaries of the platform (the company literally tries to create a community, organizing networking and social events for all CommonBond users). Additionally, what makes CommonBond special is its commitment to funding education; for every degree fully funded on its platform, the company funds the education of a student for one year at a Pencils of Promise school (so, think TOMS 1-for-1 model).
Through CommonBond, people with student loan debt can consolidate multiple undergraduate and graduate loans into a single, 10-year fixed-rate loan and refinance at a rate of 5.99% (with automatic debit), ultimately allowing borrowers to possibly save over $17,000 in repayment. The company has also recently introduced a new 15-year fixed-rate loan and a refinance rate of 6.49% (also with automatic debit).
CommonBond will save its borrowers $10M in 2014. Check out this infographic for what we can do with that $10M.