ImpactAlpha, June 3 – New York-based Pillar wants to whittle down the U.S.’s $1.5 trillion student debt issue by helping people understand and plan their loan repayments. Venture capital firm Kleiner Perkins backed the company’s launch by leading its $5.5 million funding round.
Michael Bloch got the idea for Pillar trying to figure out how he and his wife would repay her $300,000 in student debt after law school. The platform aggregates a borrower’s loans, income and spending information, then makes recommendations on how to pay down debt quickly and automates payments. The company claims an average borrower could save more than $6,000 and four years on repayment.
Pillar is meant to help counter lenders’ incentive to keep borrowers on longer repayment plans in order to collect more in interest. This could help women in particular, who comprise two thirds of U.S. borrowers and who “are disproportionately impacted due to the gender pay gap,” the company said in a blog post. “Women borrow more and earn less, which results in them needing two extra years to pay off their loans.”
A long roster of other VC firms and individuals also backed the startup’s funding round, including Patrick Kavanagh and Nadia Asoyan from Robinhood and former Wealthfront CEO Noah Weiss.