Yelo Funding, a fintech startup aiming to provide college financing that is more equitable and better suited for students’ needs, announced that it has raised $1.2 million in its pre-seed round. With this fundraising, the New York-based company plans to launch its operations in select markets and provide financing for students’ college tuition, room and board.
However, the company did not disclose the investors in the round.
Founded by Daniel Rubin, Yelo Funding offers a socially responsible solution to close the funding gap in higher education, reduces loan repayment, improves access to education, and helps students choose degree programs with favourable career outcomes. The platform also provides students with a flexible financing repayment schedule directly aligned with their employment status during the years after graduation. Rather than offering private loans that can carry high-interest rates, with repayment terms that can extend as many as 25 years or more, the firm finances student tuition using a financial instrument known as an Income Share Agreement (ISA). ISA payments are tied to earnings rather than to a fixed principal amount. They are limited in time and capped at a maximum dollar amount.
Sharing about the company, Founder & CEO of Yelo Funding, Daniel Rubin, said:
The current debt burden on students’ lives is unsustainable, and higher education financing is now ripe for disruption. YELO aims to bridge the gap when more than lower-cost federal programs and scholarships are needed. We are investing in the next generation of students and have skin in the game. College education has unfortunately become a luxury product, but in 2023, it shouldn’t be a privilege to get an education; it should be a right. YELO makes access to education more equitable and helps students evaluate the career outcomes of degree programs, giving graduates a clear path to financial success and, of course, the means to repay.
Yelo’s mission is to address the growing student debt crisis in the United States, ultimately improving access to education and helping students make better career choices independent of their financial obligations.