Student-Loan Debt and Anxiety: How Fintechs are Beating Banks

For many Americans, a student loan is the first major debt they incur—one that can affect their finances and borrowing power for years to come. For banks and credit unions that seek to connect with young consumers, providing financial advice about student loan debt is a natural conversation starter that can establish long-term advisory relationships. 

Student loans are a source of widespread anxiety and stress, with more than 40% of such borrowers worrying they are not on track to repay their loans. But FIs generally do not treat debt management in general—or student loan debt specifically—as an opportunity to engage customers and provide digital advice. For FIs, this makes student loan debt a blind spot and a big missed opportunity. Meanwhile, dozens of fintechs are filling that vacuum by crafting fiduciary-like experiences well-suited for digital banking, such as optimizing payments, building credit, reconfiguring debt, and offering debt-management features.

Key questions discussed in this Digital Lending report: 

• Why are student loan borrowers important targets for banks and credit unions?
• How are leading fintechs and FIs jockeying to provide advice-driven digital relationships?
• What competitive advantages do financial institutions have for targeting student loan borrowers? 

Companies Mentioned: 

Abe, Array, Ascent, Bright Money, Candidly, Changed, Citizens Bank, Clasp, Cleo, College Ave, Credible, Debbie, DebtPayoffPlanner, Earnest, Edly, Equifax, Experian, Fiducius, Firstcard, Juno, KeyBank, Laurel Road, Lendkey, MPower, PayitOff, Sallie Mae, SoFi, Splash Financial, Transunion, TuitionHero, U.S. Bank