SAN FRANCISCO--(BUSINESS WIRE)--Social Finance, Inc. (SoFi) announced today that the company’s Community Loan Program for students and recent graduates will match the benefits of the government’s Direct Loan Program, offering borrowers income-based repayment options, loan cancellation in the case of death, relief for economic hardship and other advantages. With today’s announcement, borrowers from participating colleges and universities will receive a range of benefits comparable to those offered by the government’s loan program at fixed interest rates more favorable than the government’s current unsubsidized Direct and PLUS loans and much more favorable than virtually all fixed-rate private offerings. A recent graduate student refinancing $30,000 could save nearly $5,000 by taking a SoFi Community Loan rather than keeping an existing Direct PLUS Graduate Loan.i
SoFi will provide all benefits on terms comparable to those currently offered by the government, with the exception of the loan forgiveness program. Unlike the government’s loan forgiveness program, which is open only to those in teaching or public service after many years of loan repayment, SoFi’s participating alumni investors may choose to reduce or cancel the debt of any borrower, including for work in teaching, public service or even entrepreneurial efforts.
“We wanted to create the best student loan we could,” said SoFi’s CEO Mike Cagney. “By matching the government’s current benefits, we’re making our fixed-interest rate student loans even better, and we hope that every lender – whether government or private – will rise to the challenge and offer students a fairer deal. If students are going to have to take out loans to pay for school, everyone should be working hard to reduce their debt burden.”
SoFi was founded at Stanford University’s Graduate School of Business in 2011 to bring the power of social networks to finance. SoFi’s community-based lending programs connect students and alumni through dedicated lending pools that provide students with lower-cost student loans, alumni with a new investment opportunity, and both groups with a way to engage each other through new online social networks.
“The whole idea behind SoFi is to use new technology and social media to get back to an old-fashioned model of finance where members of a community invest in the success of other members of the community,” said SoFi’s Cagney. “We believe the benefits offered by the government’s program are consistent with how a community should treat its members, and so we decided to match them.”
The SoFi Community Loan Program is expanding to business school, graduate and undergraduate students at 40 public and private universities across the country, as well as to recent graduates seeking to refinance or consolidate their existing loans. The company will offer up to $150 million in new loan offerings for the upcoming school year.
Key features of SoFi’s Community Loan Program include:
- 6.24% (6.32% APRi) fixed-rate loan for enrolled students that drops to 5.99% (6.13% APRi) in repayment with auto payments.
- 5.99% (5.99% APRi) fixed-rate refinance loan for recent graduates with no origination fee and required auto payments. 5, 10 or 15 year repayment terms available.
- $5,000 loan minimum, $200,000 maximum (or up to cost of attendance, whichever is less), with no need for a co-signer.
- Deferrals for continuing education; a grace period on graduation; non-standard repayment options such as income-based and extended repayment; deferment and forbearance for economic hardship and other defined circumstances; cancellation upon death or disability; and possible forgiveness for teaching, public interest work, entrepreneurial efforts or other reasons.
- Access to the SoFi online community, where SoFi facilitates online and offline interaction between students and alumni in areas ranging from career advice to loan assistance.
- Qualified alumni can invest in a certificate backed by student loans from their alma mater (IRA eligible). Within the SoFi community, alumni investors connect with loan recipients in a meaningful way, providing career guidance and learning from a new generation of future leaders.ii
More details on the program can be found at https://www.SoFi.com.
Enrollment in SoFi’s Spring 2012 Community Refinance Loan Program will be open until June 30 or until funds are fully allocated. SoFi’s Fall 2012 Loan Program for enrolled borrowers will open in July 2012. Loan dollars will be distributed to eligible students on a first-come, first-served basis.iii
Founded in 2011, San Francisco-based Social Finance, Inc. “SoFi” offers a community-based lending and refinancing program open to Graduate and Undergraduate students at US universities. Interested students, alumni and investors are encouraged to visit www.SoFi.com for more information.
i. Terms and Conditions Apply. Please visit http://www.sofi.com/disclaimers/05-02-2012 or call 866-357-6342 to receive a fax or hard copy of all applicable disclaimers, assumptions and up-to-date information. SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SOFI.COM FOR THE MOST UP TO DATE PRODUCT INFORMATION.
ii. Certificates offered by SoFi Securities, LLC. Please visit http://www.sofi.com/disclaimers/05-02-2012 for more information.
iii. All loans made under Social Finance Inc. (dba SoFi) or SoFi Lending Corp (dba SoFi). Social Finance, Inc. is a licensed California Finance Lender. License Number: #6054513.