Australian entrepreneur has a fintech solution to America's student debt crisis

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A generic picture of a woman working in an office sitting at her desk typing on a computer.
A generic picture of a woman working in an office sitting at her desk typing on a computer. Reuters/Catherine Benson

The United States' student debt crisis affecting generations of Americans has become an increasingly high-profile issue over the last decade. It has been a cause of delay for events such as home purchases and even marriage.

Some fintech companies has stepped in to alleviate the negative impacts of the student debt system. There are companies that bring in solutions from countries that somehow do not have a huge student debt crisis.

Australian entrepreneur Stephen Dash is taking inspiration from his country’s approach to help with the student debt crisis in America. The Credible CEO thinks that Australia’s approach to offer student borrowers a marketplace of easier options to get refinance loans is good.

Dash’s home country has an income-based debt repayment system. Credible’s tech assists borrowers refinance to make affordable payments.

Through its website, borrowers respond to a survey. Various questions are being asked such as how much debt they acquired and which institution they attended. The result of the survey helps the borrower determine which refi option is best for him.

“What differentiates us is that we’re providing real choice,” ben Zing A quotes Dash as saying. He added his company is not only providing marketed rates or rate ranges.

San Francisco fintech “mayor” RonSuber has seen value in Credible’s model as well as consumers’ respond to it. He said the banks continue to have the lowest cost of capital, and Dash’s company is able to link parties in a similar way that Kayak has done for the travel industry.

Credible has incorporated its technology with lenders and credit bureaus. This way, borrowers are offered personalised refinancing options. According to a press release, over 80,000 people qualified for loan offers through Credible in the first six months of the current year.

Northwestern University economics professor Robert Gordon discussed a policy prescription for dealing with America’s student debt issue in a lecture at the London School of Economics last month. “About the escalation of college debt, I think we need to move toward a British or Australian system of income-contingent repayment of college debt,” he said, according to Quartz Media.

Those who are unemployed or engaged in a low-paying social service activity may not need to repay debt. Gordon is known as one of the foremost experts on US economic productivity. His nod to America’s student debt problem came in the context of policy prescriptions to address the drop of US labour productivity.

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