CommonBond, a student loan crowdfunding platform with a vision and plan to fix the broken student loan system, recently announced its official launch at the University of Pennsylvania’s Wharton School of Business. The company has raised a total of $3.5M from alumni and investors: $2.5M from prominent alumni investors to disburse to students in the form of loans, and an additional $1M in seed funding from a super angel investor to capitalize the business.
Founded by David Klein, Michael Taormina, and Jessup Shean in New York City in 2011 CommonBond connects student borrowers and alumni investors to provide loans at a lower fixed rate. Through the CommonBond model, students pay a 6.24% fixed interest rate and can save $20K over the course of loan repayment relative to traditional alternatives, while alumni investors can expect to earn an annual return of over 4%.
“The student loan system is complex, slow-moving, and expensive. It doesn’t have to be, so we’re fixing it,” Klein says. “With the launch of CommonBond, we’re bringing the power of community to finance to reduce the burden of student debt and make finance better. It’s a win-win for student borrowers and alumni investors: students save, while investors earn.”
The website – www.CommonBond.co – is now live and accepting applications. CommonBond will fund over 50 Wharton MBA students in December, just in time for second semester, before expanding nationally in 2013.