The cost of higher education in the United States has risen to an extortionate amount. In 2018, the average yearly costs for an undergraduate degree were $20,770 for public schools (in-state students) and $46,950 for nonprofit private schools, with total costs at dozens of private institutions exceeding $70,000 a year. According to a survey by MagnifyMoney, 39 percent of current students with loans would consider dropping out of school just to avoid taking on more debt.
Sadly, millions of students have been forced to do exactly that. According to a survey by LendEDU, 51 percent of college dropouts left due to costs, and almost 80 percent of those surveyed expressed the need to possibly delay graduation because of financial problems. On top of that, the average college dropout halts their students with about $14,000 in student loan debt, which often leads to additional financial problems in the future. Many colleges and universities offer emergency aid programmes, but they’re often difficult to manage and incur expensive costs.
Edquity: “Money shouldn’t be the reason you don’t graduate from college”
The team at Edquity wants to ensure that no one feels forced to dropout of school for financial reasons. Based in Brooklyn, the startup offers the first research-driven basic needs insecurity and emergency aid technology platform for college students.
Founded in 2016, the premise for the startup was based on research by Sara Goldrick-Rab, Edquity chief strategy officer and founding director of the Hope Center for College, Community, and Justice. Edquity aims to support students and their basic needs in a way that expresses the need for streamlined access to resources and assistance.
In addition to serving as a one-stop shop for social service referrals, Edquity provides emergency aid underwriting and disbursement functionality to help students address emergency financial needs and ensure they can continue their education.
“While only the public sector can address the root causes of poverty, we’re showing at Edquity that we are transforming emergency aid provision to stopgap some of the symptoms, and are doing so in such a way that not only manifests a win-win-win revenue model but also presents a massive long-term growth opportunity,” Edquity CEO David Helene said in a statement.
Currently offering three programmes—targeted towards high school students, university students and educational institutions—Edquity wants to help students find aid from all angles. The high school app helps students compare financial aid at colleges, automate their daily budgets and choose a college based on personalised costs and benefits. The college platform offers an app to monitor students’ financial health, find local resources and receive emergency aid. The institutional programme offers an analytics platform to analyse how emergency aid programmes are supporting students and an in-depth look into students financial health and basic needs insecurity.
Stepping in after a natural disaster
In October 2018, three days after 10 tornados ravaged the surrounding area, Edquity launched its evidence-based technology platform to administer emergency aid and predictively refer students to resources in the Dallas County Community College District. Within the first hour of being live, the platform processed over 100 applications. Since then, it has processed over 500 applications and administered about $100,000 in emergency aid.
Of the students who needed assistance, 75 percent have experienced housing insecurity; 53 percent have experienced food insecurity; 50 percent have kids, with 30 percent having a child under the age of five; and 34 percent having been homeless.
“We’re excited to grow the number of colleges we work with over the next 18 months to support students around financial emergencies and their basic needs and move the needle around promoting greater equity in postsecondary education,” said Helene.
Edquity has raised $2.4 million in an oversubscribed seed funding round led by ECMC Foundation, with participation from the Omidyar Network, Spring Point Partners, the American Family Insurance Institute for Corporate and Social Impact, and Michelson 20MM Foundation.
“Building a company that is laser-focused on putting the needs of the student first is hard work and requires a fierce commitment to our values, and we’re thrilled to partner with truly catalytic mission-aligned investors who can help us support postsecondary students of all ages and walks of life and realize our market opportunity in the process,” Helene said.
The funds will be used to expand the evidence-based technology platform through its national network of colleges and universities.
“We believe Edquity has the potential to more efficiently and cost-effectively manage emergency aid on behalf of universities and colleges across the country, ensuring students are able to access the vital funding they need to persist through and complete their studies,” said Jessica Haselton, director of program-related investments, ECMC Foundation. “We’re proud to have led the recent round of investments and hope that Edquity will be able to garner additional support from investors given the strong results from the pilot.”
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