Could technology alleviate student loan woes? Some CEOs think so
The process of applying for and managing student loans is a complicated web that technology could make easier to navigate, the founders of two college financial management companies said at South by Southwest EDU conference in Austin, Texas, on Monday.
Research from Western Governors University found that only 28% of borrowers were aware of all loan repayment and forgiveness options available to them. As a result, companies like Beam and Savi were created as a means to connect more students to repayment and forgiveness programs.
Aaron Smith, co-founder of the student loan wellness platform Savi, said during a session that he believes most colleges want to help their students deal with the debt they take on to earn their degrees and have special programs and exit loan counseling to do so. But he claims those services are limited and students are often on their own.
“I think this idea of you still need that kind of person-to-person connection for a lot, but this idea that technology can help to expand your reach, scale up those kinds of education programs, help people who don’t want to talk to a person on the phone and want to self-service — I think there’s a big need there,” Smith said.
David Helene, founder of Beam, which bills itself as an “all-in-one college financial success” app, said the people tasked with helping students navigate their loans bear unsustainable caseloads. He suggested that natural language processing tools could be applied to proactively refer students to various resources.
Smith said that many users of Savi will forward their “extremely complicated letters” from the Department of Education and other loan servicers to their advisers for help deciphering the information. He proposed that generative artificial intelligence tools like ChatGPT could be used in the short-term to support loan borrowers.
State governments are now starting to create data-sharing agreements across agencies to make it easier to enroll students in these programs and help community members get connected to government assistance.
“We’re seeing really encouraging efforts among certain governments to try to break down the silos,” Helene said. “I think more and more of these efforts are needed. I think more and more of these efforts actually become much easier with some of the technologies that we described as we think about translating really old disparate data languages that requires some significant translation.”
