Journey to Tackling the Student Loan Crisis
Many students face a common dilemma – the overwhelming burden of student loan debt.
Nearly 45 million borrowers collectively owe more than $1.5 trillion in student loan debt in the United States and the Federal Reserve estimates 69% of students graduating in 2018 had student loans.
With the average student debt balance held by borrowers coming in at nearly $30,000, many graduates find themselves looking for the right repayment program, but that too can become overwhelming.
While most agree that the ever growing amount of student loan debt is a major issue, or crisis, few can agree on solutions. No stranger to academic funding, recent U-M MBA graduate Catalina Kaiyoorawongs was determined to see how she could make a positive impact on the issue of student loans.
Catalina’s involvement with education and education funding started with a question, “What is my purpose.”
Her focus while an undergraduate was PreMed and Environmental Policy before joining the Manhattan District Attorney’s Office. During that time she then considered the idea of going to law school.
“I was asking myself what I wanted to do – medicine, lawyer, engineer, those were the major options I knew about. None of these options seemed to fit what I felt my purpose was.”
Facing this question Catalina left the District Attorney’s Office and joined the Peace Corps where she developed health education programs in Guatemala.
“My time in Guatemala is what really drove me to my current work,” she said. “I realized the power of education to change the trajectory of people’s lives.”
After her time abroad Catalina began work as a program manager at a federally funded volunteer program where she made the decision to volunteer at a college access program in her Florida hometown, which ultimately resulted in a full time gig.
During her time at the program she brought together the local chamber of commerce, businesses, and colleges to support FAFSA completion workshops to ensure those who were eligible received funding for their education.
“I turned a 20 person program into a 2,000-plus person program,” she said. “It was like a startup, it wasn’t a completely well-oiled machine, but we were in a really good spot.”
With her success in Florida, Catalina decided to enroll in Michigan as a dual master’s student in education and the MBA program. It was here that she turned her attention from getting potential students funding to helping graduates pay off their student loan debt.
“I did really well in all of the required course work, but I didn’t feel like I was living my passion and my purpose,” she said. “I didn’t know exactly what I was going to do – but I needed to do something.”
Catalina joined U-M’s Innovation in Action, a campus-wide competition giving groups the opportunity, the tools, the people and the room to take on the world’s largest challenges.
Her team spent two months living in the problem of student loan debt, something Catalina described as very uncomfortable, but eye opening, “We all knew student loan debt was a problem, but why was it a problem, where were the key pain points, and where were people getting tripped up?”
The group came up with five solutions and polled individuals with student loan debt, which resulted in the creation of Dough – the first version of her current company LoanSense.
The idea, personalized guidance on how to navigate the federal process and get on the right repayment plan for employees of companies utilizing the service, won first place during the 2018 Innovation in Action and was the 2018 Grand Prize Winner of the Detroit Fintech Challenge.
As a digital student loan advisor, LoanSense is offered as an employee benefit. The platform helps employees with student loans make repayment decisions and retains these employees for employers with the goal of reducing employee debt burden and accelerating payoff.
The software is close to being ready for beta users and Catalina used her time in TechArb Student Venture Accelerator during the summer to move the project forward.
“Sharing the space with the other teams and passing along contacts and resources was really helpful this summer, TechArb gave a level of stability we need to launch,” she said.
With the goal of providing a brighter financial future to those with student loan debt, Catalina and her team plan to continue to act as advocates of every employee’s financial success.