The other day my daughter told me her friend’s plans to go to nursing school have stalled. The reason? Lack of funds.
“This will be her second bachelor’s, and she can’t get any financial aid.”
That sounds dubious to me—I’d urge her friend to keep asking questions and of course to seek out scholarships.
But here’s another option: Applying the power of tech.
Although I don’t like loan financing and prefer that students look for scholarships as a first resort, Pay Your Tuition—an online platform that connects students with small education loans—may be an option for those who’ve been turned down for loans because of a lack of credit history.
“We are the last mile to get more graduates to the finish line,” says Stacie Whisonant, founder of PYT as it’s also known, in an article on the website Faces of Founders.
The excerpt below discusses how the platform works and Whisonant’s challenges as a black woman in the tech space.
Realizing how difficult it is for students with little to no credit history to secure small loans for college, Stacie Whisonant started Pay Your Tuition, an online platform for students to access small private loans for higher education. “We are the last mile to get more graduates to the finish line,” she says.
PYT’s model is simple: students can secure small loans (about $5,000) to help with education costs. Students are responsible for raising 20% of the loan, which they can crowdfund on the PYT website. PYT will connect students with lenders to cover the remaining sum. PYT doesn’t charge students to use the platform. Rather, the paying customer is the bank lender. PYT merely helps show lenders that these students are trustworthy clients, she says.
After a career in the military and finance, Whisonant thought she was ready for the challenge of entrepreneurship. But the biggest struggle she’s faced is herself, she says. That is, “being a woman and being black.”
“I recall one pitch to investors, where a potential investor asked me three times who had originated the idea for PYT. It was as if this white male potential investor simply couldn’t accept that I, this African American female entrepreneur, conceived of this innovative solution and launched this company. It’s hard for me to imagine him asking the same question three times of a white male entrepreneur making the same presentation,” she says.
Statistics indicate Whisonant is facing a difficult reality: fewer than 5% of VC-funded startups in the U.S. have a woman CEO and fewer than 1% are led by African Americans. Between 2012 and 2014, only 24 of 10,238 female African American entrepreneurs raised venture-backed capital — or just 0.2%. In addition, they only raised on average $36,000; compare that to the average startup by a white male, which will raise on average $1.3 million in venture funding.
For more, go to Faces of Founders.