Graduating LSA seniors Ron Everett, Josh Shifman and Ben Foster are set to transform the trillion-dollar student loan industry with the release of a new website, Remotize, that will provide student borrowers with better interest rates.

Shifman described this venture as one that gives students more control over financing their loans.

“ seeks to give students the power back,” he said.

Drawing from their diverse educational backgrounds — history and computer science among them — Everett, Shifman and Foster said they have noticed an enormous gap in the marketplace for student loans.

They described how investors are looking for reliable students and risk-selective returns, while students are looking for lower interest rates. When both ends meet, students and investors benefit from returns in the form of education and money.

However, it is when the two ends do not meet, they explained, that steps in.

“Remotize offers students a platform to post customized loan plans, while investors browse the marketplace and place bids on student loans, using an auction-based system,” Everett said. “The platform is ideal for investors seeking to diversify their portfolios.”

From a student standpoint, Remotize better allocates loans with lower interest rates to credit-worthy individuals, through a competitive market, which ultimately reduces inefficiencies and benefits both borrowers and lenders.

Shifman said federal loans do not always suffice when it comes to paying for college.

“Though federal loans provide low interest rates for students, these loans currently do not cover the full cost of tuition,” Shifman said.

Everett explained a lot of students make up the difference by turning to private lenders; though oftentimes, they face high interest rates.  

“We noticed a problem where federal loans and financial aid provided by the school do not cover the full cost of tuition,” he said. “So you see a lot of students here resorting to private loans, and the problem there is that these private banks give students inflexible loans and high interest rates.”

Logistically, Remotize seeks to harness the power of data analytics to provide investors and students with customized service. The company expects to assess students on a variety of metrics, including educational and financial backgrounds, to better understand individuals’ profiles and credit worthiness.

Though the founders are still developing systems for managing such analytics, they have already taken steps to prepare the company for future growth.

“We just got funding from the Center for Entrepreneurship, from Jumpstart Grants, and we are also applying for a variety of accelerators,” Foster said.

The group has also reached out to the University of Michigan Law School’s Entrepreneurship Clinic to learn more about the legal system.

Remotize is not only utilizing the University’s resources but also listening to student concerns. Engineering sophomore Noriyuki Kojima said the website can be very useful. 

“[It] is a tremendous opportunity to utilize machine learning and data analytics for the benefit of society,” he said.

As an international student from Japan, Kojima said he believes Remotize can particularly benefit international students in the future.

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