When David Klein decided to go back to school to pursue his MBA in 2011, he was faced with the hard reality of paying his way 100% with student loans.
“That’s when I experienced firsthand the high rates, complex process and poor service that make traditional student lenders so frustrating and confusing,” says the co-founder and CEO of CommonBond. “I knew there had to be a better way — so I created one.”
CommonBond — Klein’s company that uses data and technology to lower the cost of student loans —has since funded more than $1 billion in loans and worked with more than 100 companies.
CommonBond’s proprietary algorithm leverages traditional and nontraditional data points about a customer to enable the firm to provide a personalized, low interest rate in two minutes, explains Klein, a 2017 recipient of an EBN Benefits Technology Innovator Award. These low rates help members “refinance their student loans and save over $24,000, on average,” he says, noting that the process also saves employees money because CommonBond’s student loan application automates many tasks that a traditional bank would have to perform manually.
In October 2016, Klein led the launch of CommonBond for Business, a new SaaS benefits platform that empowers employers to help their employees better manage and pay down their student loans.
“The idea for CommonBond for Business came from the fact that we were looking for ways to attract and retain top talent here at CommonBond,” Klein says. “We realized contributing to our employees’ student loan payments was a benefit that should exist. Once we saw the impact it had with our own employees, it was clear to us that we needed to provide the solution to other companies.”
He continues, “we know that the two most important things to HR professionals are providing great benefits to their employees to help retain them, and being able to offer these benefits efficiently. Technology has enabled CommonBond to develop a new product category — student loan benefits — that didn’t really exist two years ago. We can now offer that service to HR professionals in a way that makes it truly seamless for them to implement, manage and measure.”
In general, Klein says, technology has the ability to make employee benefits more “more accessible and personalized than ever.”
“Employers can go beyond the traditional benefits package and offer solutions truly tailored for each [employee’s] needs,” he says. “More broadly, technology has become a way for employers to get ahead in the arms race for talent. You’re going to see more and more companies start to add new technologically driven products and services to their benefits packages in the next few years.”
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