March 31, 2017
Raise.me Highlighted by TechCrunch
Raise.me grabs $12 million to fix how colleges provide financial aid
by Jonathan Shieber
March 29, 2017
Preston Silverman got the idea for Raise.me, a startup that has created a clever new way for students to receive financial aid, while working as a volunteer at a school for untouchables in India called Shanti Bhavan.
Taking a break from his job at a strategic consultancy that focused on emerging markets, Silverman was convinced that the educational system in the U.S. was just as broken as the one he was seeing in India and realized there had to be a better way.
For him, the issue was a misalignment of interests and incentives. Everyone knows that a college student these days may graduate with a near-crippling amount of debt — on average about $37,000 per student. But even as most students and graduates begin their adult lives struggling under this debt burden (which may or may not pose a significant risk to the entire U.S. economy), colleges are giving out more than $50 billion in scholarships and grants.
The problem, Silverman saw it, was that the $50 billion is being doled out among a smaller, self-selecting applicant pool because most students don’t even bother applying to some colleges or universities that would give them money — for the simple fact that they think those same colleges are too expensive to attend.
So kids aren’t applying to college because they don’t think they can pay for it at the same time colleges are trying to find worthy candidates to receive financial aid.
It’s that Catch-22 that Raise.me hopes to break. And it’s the company’s approach — having colleges and universities (including my alma mater, Oberlin) award “micro-scholarships” for academic and extracurricular achievements throughout high school rather than doling out lump-sum awards after a student applies to their school — that has attracted $12 million in new venture capital financing to expand the service nationwide.