{"id":341094,"date":"2017-05-17T03:10:33","date_gmt":"2017-05-16T19:10:33","guid":{"rendered":"http:\/\/techcrunch.com\/?p=1491483"},"modified":"2017-05-17T03:10:33","modified_gmt":"2017-05-16T19:10:33","slug":"sofis-ceo-wishes-the-us-had-less-student-loan-debt","status":"publish","type":"post","link":"https:\/\/people.utm.my\/asmawisham\/sofis-ceo-wishes-the-us-had-less-student-loan-debt\/","title":{"rendered":"SoFi\u2019s CEO wishes the US had less student loan debt"},"content":{"rendered":"

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SoFi was founded on the business of helping high-earning graduates refinance their student loans. But perhaps ironically, CEO Michael Cagney thinks today\u2019s\u00a0record amount of student loan debt is a bad thing.<\/p>\n

\u201cI wish there were\u00a0a lot less student loan debt out there,\u201d Cagney said in an interview at Disrupt NY today. Part of\u00a0the reason he believes so much debt exists is that students don\u2019t get enough\u00a0financial education before they go to college and agree to take out those loans.\u00a0<\/span><\/p>\n

\u201cWhen you go to a school and take a loan out, no one explains what you can afford, how much money you\u2019re going to make when you graduate and\u00a0how much you\u2019re able to pay back,\u201d he explained.<\/span><\/p>\n

Meanwhile, universities aren\u2019t incentivized to provide that education because it\u2019s in their interest to have students matriculate, and there\u2019s no downside to the college when a graduate is unable to pay back their loans.<\/p>\n

But if you find the right customers, the ballooning student debt problem could\u00a0also be an opportunity, Cagney and his cofounders understood.<\/p>\n

\u201cWhen we were at Stanford, one of the things that was striking to us\u2026 was that no one in the Graduate School of Business had defaulted on a loan in 35 years, but they were paying 6.5%-7.5% in interest on those loans,\u201d he said. \u201cI\u00a0thought we could provide a better experience to those people.\u201d\u00a0<\/span><\/p>\n

They realized they could provide a better experience not just to those who wished to refinance their student loans, but also to those seeking other financial services.\u00a0\u201cIf you\u2019re 35, you\u2019re probably unhappy with what you get from your bank, from your student loan provider, from your wealth management provider,\u201d Cagney said.\u00a0<\/span><\/p>\n

With that in mind, the company is moving into other lines of business. It\u2019s already released a mortgage product and today released its wealth management solution. The company also has plans to launch more traditional banking products later in the year.<\/p>\n

\u201cOne of the biggest challenges that we have is we want to give our members a deposit account, but the only way you can structure that today is with a banking license,\u201d Cagney said. \u201cWe have the ability to apply and we probably will.\u201d That said, he didn\u2019t the rule out possibility of finding other ways to offer checking, deposit and credit card services.<\/span><\/p>\n

While SoFi has grown pretty dramatically over the last several years, the company is in no rush to IPO.<\/p>\n

\u201cWe\u2019re not in a rush to go IPO,\u201d Cagney said. The company is well capitalized, he noted, with $1.9 billion\u00a0backing it. Most importantly, according to Cagney the company is already profitable. Besides, no one ever benefits from providing forward-looking guidance on public offerings.<\/p>\n

\u201cI always get into trouble for giving timelines,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"

\"\" SoFi was founded on the business of helping high-earning graduates refinance their student loans. But perhaps ironically, CEO Michael Cagney thinks today’s\u00a0record amount of student loan debt is a bad thing. “I wish there were\u00a0a lot less student loan debt out there,” Cagney said in an interview at Disrupt NY today. Part of\u00a0the reason he believes so much debt exists is… Read More<\/a><\/p>\n

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