Payitoff Notches $8.5M Ahead of Feb. 1 Student Loan Repayments
Payitoff, an automated student loan management company serving the FinTech sector, has generated $8.5 million in a seed round, according to a Wednesday (Nov. 10) press release.
Led by Lightspeed Venture Partners, the round saw participation from Sound Ventures, Struck Capital and Social Leverage, in addition to a number of angel investors, per the announcement. The fresh funds will assist the 4-year-old company in expanding its employee base and onboarding dozens of new FinTechs as they prepare for the resumption of student loan payments on Feb. 1, according to Payitoff.
“With loan forbearance coming to an end and 43 million borrowers re-entering payment, we’re about to experience a ‘student debt tsunami’ that will impact our economy and financial markets in ways never experienced before,” said Justin Overdorff, partner at Lightspeed Venture Partners. “Payitoff offers financial services and innovative solutions, one that takes into account the financial health of their customer, the borrower.”
Payitoff’s API solutions enable partners to embed student loan repayment immediately. Payitoff users save the average borrower $2,800 per year, according to the announcement. Approvals for various programs, such as income-driven repayment, can be finalized in about 10 days as opposed to the industry standard of six weeks.
In related news, FutureFuel.io, in a joint effort with Fiserv, last month announced plans to bring the FutureFuel.io student loan repayment platform to more borrowers. Offering a personalized approach to student loan repayment based on the borrower’s needs, the platform leverages machine learning technology and behavioral economics to help consumers determine how best to pay off their loan.
Read more: FutureFuel.io, Fiserv Announce Collaboration on Student Loan Repayment Platform
As of 2019, there were 44 million student loan borrowers who collectively owed $1.5 trillion in debt, making student loans the second-highest debt category behind home loans, as PYMNTS reported. By 2023, it is estimated that 40% of student loan borrowers will default on their loans.
See also: How Frank Wants to Help Students Stay Away From Debt