This summer’s student debt repayment tool continues to flourish with $6M Series A expansion

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A number of recent activities surrounding student debt repayment, including government policies such as the SECURE ACT 2.0, passed by Congress in December, created provisions for employers to match student loan payments for those with debt, while also adding to retirement accounts.

In late February, the Supreme Court heard arguments related to a lawsuit that sought to block President Biden’s debt relief program. Updates related to this that happened last week indicate that the Supreme Court may reject the program.

However, some fintech startups have not only stepped up to offer some help options, but also provide employers with a way to help offload some of the burden while also providing a recruitment and retention tool. These include Goodly, Highway Benefits, Candidly and Summer, which raised $6 million in additional Series A funding.

General Catalyst, QED, Flourish Ventures, Partnership Fund for NYC, Story Ventures, Gaingels, Calm VC and Avidbank participated in the funding round, which brings the certified B Corp. its Series A funding to $16 million, and $18 million in total funding.

Will Sealy, co-founder and CEO of Summer. Image credit: Summer

It’s common knowledge that nearly 47 million student loan borrowers owe about $1.8 trillion, and when the global pandemic hit in 2020, the federal government put a pause on federal student loan payments that has now lasted three years, according to Will Sealy , co-founder and CEO of Summer.

“The challenge for borrowers is that in the last year, there have been more changes in student loan policies and student loan rules than there have been in the entire previous decade,” Sealy told TechCrunch. “The changes are confusing and very tailored to the type of loan you have, which for the average person could be a dozen loans: some from private banks, some from the federal government and some issued to you as a borrower by your parents.”

Although the payment moratorium has helped, Sealy noted that the average loan payment is about $700 per month, and it is “nerve-wracking” not knowing when payments will resume, meaning the payments will likely hit millions of people at once.

Sealy, a former policy analyst and assistant to Sen. Elizabeth Warren, and a veteran of the Consumer Financial Protection Bureau, joined in the summer of 2017 with COO Paul Joo, who brings previous experience from the US Attorneys’ Office and the Boston Consulting Group.

When TechCrunch reported on Summer’s $10 million Series A back in 2019, the company was really just getting started with its approach to helping borrowers get a full 360-degree view of their current student loan situation, and offering options for how to repay it in most economically efficient way possible.

Now four years later, Summer works with financial institutions, employers and other organizations to help employees plan for college, learn ways to reduce their student loan debt burden and optimize retirement savings through employer matches.

It has also secured partnerships with companies, such as Fidelity Investments and Intuit, and expanded its work with the American Federation of Teachers to put Summer in front of tens of millions of employees. To date, the company has delivered over $1 billion in total projected savings for borrowers across the United States, Sealy said.

Meanwhile, the new funding will enable Summer to roll out new products and services in addition to hiring Leigh Gross as chief revenue officer. Gross, who joined the company from credit data availability company Array, will be charged with leading Summer’s initiatives around sales, business development and revenue stream growth.

“We help employees enroll in federal and state loan assistance programs to reduce debt, and work with employers to pay off debt even faster so employees can take advantage of those types of benefits on the job,” Sealy said. “Additionally, new legislation allows any employee who is currently paying off their student loans or continues to do so in the future to have their employer match those payments to their retirement plan. Borrowers will no longer have to choose between saving for a pension or to pay off debts.”