Home FinTech Investors Tackle Student Debt: FutureFuel Receives $11.2 Million in Financing

FinTech Investors Tackle Student Debt: FutureFuel Receives $11.2 Million in Financing

Multigenerational debt holders with student debt are on the rise. There are now 44 million people in the U.S. who have $1.5 trillion in student loans. This debt not only impacts the person who owns it, but the student loan problem also has a far-reaching economic impact. Parents, youth, and even grandparents are struggling with the implications of how to address this debt.

In the process, research shows that those with this debt have to face eight to 10 years of delayed home ownership as well as a shortage on 401(k) contributions. Despite the college degrees and lucrative positions, those with student debt still face a wealth gap that many believe is close to impossible to close. 

Rep. Scott Peters, Co-Sponsor of the Employer Participation in Repayment Act, who aims to revise the tax code to facilitate employer assistance in the repayment of student loans comments, “When I was in college, the cost was much lower, and I benefited from student loans. Today, young Americans are so crippled by college debt they can’t invest in a home, start a family, or save for retirement.”

Relieving the Student Loan Burden

However, both startups and investors realize the importance of developing solutions that reduce their financial burdens. Enter companies like FutureFuel.io, a technology provider of student debt employer benefits solutions, and its founder, Laurel Taylor.  Their approach to student debt is to make student debt benefits part of employer-sponsored benefits plans.

Next, add in investors who want to crush this student debt by funding companies like FutureFuel. Today, FutureFuel announced that Rethink Impact, a female-led venture capital firm who focuses on impact investing for women-led technology businesses, is leading a Series A round of $11.2 million to fund their growth.

However, they are not alone in helping FutureFuel on this round of funding. Others include Breton Capital, First Data, G9 Ventures, The Impact Engine, Reach Capital, Salesforce Ventures, SixThirty, and Vulcan Capital. To date, FutureFuel has received $15.7 million in funding.  

FutureFuel’s Platform For Student Loans

FutureFuel.io partners with employers to offer a comprehensive approach to the student debt dilemma through its FutureFuel.io Student Debt FinHealth Platform. This SaaS platform offers six main components: 

  • Repayment: Employers can offer contributions directly to employees’ student loans. Also, employees can leverage their existing benefits to help pay down student debt. These benefits may include unused vacation days, bonuses, or new employer-sponsored contributions.
  • Round-Up: This automated feature takes spare change and applies it to the user’s highest-interest-rate student loan.
  • Refinancing Marketplace: The company curates multiple lenders on a single platform who then compete to refinance these student loans. Those that have used the marketplace have saved an average of $19,000 over the life of the loan and lowered interest rates by approximately 1.7 percent.
  • Roll Up: FutureFuel’s platform can aggregate a user’s average of four to seven student loans in one place. This helps the user understand, manage, and automate payment. FutureFuel.io also uses metadata on each loan and personalizes how each action the user takes impact their approach to paying down this student loan debt.
  • Recalibrate: Users can access a personalized student loan calculator to better understand their total debt, dollars spent, and days saved by using FutureFuel.io’s features, including refinancing, employer-sponsored repayment, and the round-up tool.
  • Read: To improve overall financial literacy, FutureFuel delivers relevant content through its platform.
  • Regulation: The company integrates student debt benefits in connection with 401(k) program design.

FutureFuel’s platform also provides employers with many benefits in the process, making it a win-win. They can recruit and retain top talent, increase workforce diversity, capture additional productivity through decreased stress related to the financial burden this talent carries, and shorten the length of users’ debt load by approximately three to five years. Also, an employer can launch and go live with the platform within one hour with no payroll integration required. 

From an Increasing Problem to Fueling a Solution

FutureFuel.io is gaining traction, attracting small and medium employers, Fortune 500 customers, and channel partners that include Colonial Life, Student Choice Credit Union, and Ultimate Software. To date, several million employees and users are already experiencing what this solution has to offer. 

Jenny Abramson of Rethink Impact noted, “The results employers have seen from providing FutureFuel.io offerings to employees speak volumes. Employees using the platform are 35 percent more likely to outperform their peers, have a willingness to work for their employer for five years, and women and persons of color indicate they prefer student debt benefits 11 to 1 over 401(k) benefits.”

Along with other companies like SoFi student refinancing and student loan marketplaces like Credible, FutureFuel and the investors funding these fintech startups are starting to make inroads into the mountain of student loan debt. In turn, the future may be brighter for university students who can make smarter borrowing choices and more effectively manage their debt as they enter the workforce.

About ReadWrite’s Editorial Process

The ReadWrite Editorial policy involves closely monitoring the tech industry for major developments, new product launches, AI breakthroughs, video game releases and other newsworthy events. Editors assign relevant stories to staff writers or freelance contributors with expertise in each particular topic area. Before publication, articles go through a rigorous round of editing for accuracy, clarity, and to ensure adherence to ReadWrite's style guidelines.

Brad Anderson
Former editor

Brad is the former editor who oversaw contributed content at ReadWrite.com. He previously worked as an editor at PayPal and Crunchbase.

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