This story is part of a series in Concentrate about Washtenaw County businesses' response to the COVID-19 pandemic. Support for this series is provided by Ann Arbor SPARK.
When Catalina Kaiyoorawongs contracted COVID-19 in March, a cloud of uncertainty descended on her world.
More than just her health was in jeopardy. The future of LoanSense, the Ypsilanti-based tech startup she had co-founded and poured her heart into, was also suddenly threatened. LoanSense is a digital student loan advisor, based at Ann Arbor SPARK's SPARK East business incubator, that simplifies the loan repayment process through customized plans emphasizing loan forgiveness.
Pre-COVID, the company focused on working with employers to offer employees student loan assistance as a benefit. After successful fundraising in January, Kaiyoorawongs and her co-founder Ivan Herndon were just about to start a pilot phase when the pandemic delivered a shocking turn of events.
"Pretty much, we woke up in March and a number of partners had pushed back [or] cancelled their launches," Kaiyoorawongs says. "Ivan had just left his full-time job at StockX for all of the launches that were now not happening. We didn't know what we were going to do."
It didn't take long for them to resolve not to let the virus stop them. In fact, they actually landed on a better go-to-market strategy that has allowed LoanSense to expand and flourish.
"We said, 'We are going to listen to the market and adapt with what the market needs us to do,'" Kaiyoorawongs says. "We came out of March with a vengeance. From April to May we served hundreds of users."
The surge in business was the result of a pivot to working directly with individual consumers rather than collaborating with employers, which Kaiyoorawongs says is a harder sell when companies are preoccupied with more pressing pandemic-related details.
The move is especially timely given that many people need help to understand the student loan provisions in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
Kaiyoorawongs has begun discussing how people can take advantage of the CARES Act in a new webinar series. Attendance at most of the weekly free webinars has been at maximum capacity.
"What COVID has done is created zero-dollar payments on student loans," she says. "But what people don't understand is that if they don't file into the right plan, those payments just get pushed to the end of 10 years."
Stressing the importance of education, Kaiyoorawongs adds that webinar participants also learn about student loan strategies, how to understand their loan files, and the key aspects of loan literacy. Participants who decide not to manage their own loans can choose to pay LoanSense experts to help them.
Getting started takes mere minutes. After a sign-in that takes about 30 seconds, users answer five questions and upload their loan information. The app then recommends the best path to student loan repayment or forgiveness.
"We have basically streamlined an entire federal process. It couldn't be easier," Kaiyoorawongs says.
Once a person is on board, a LoanSense expert can liaise their paperwork from start to finish. Over the last year, the company has researched and cataloged all the errors that people commit when filling out their paperwork themselves. This data and expert knowledge of the biggest pitfalls has resulted in LoanSense helping clients save thousands of dollars.
Just a week ago Kaiyoorawongs personally helped a doctor get back $117,000 of extra payments he made prior to the announcement of the CARES Act.
"Before COVID he decided to pay back his loans as quickly as possible," she says. "Suddenly he could get six months of zero-dollar payments counted toward forgiveness. And the [federal Health and Economic Recovery Omnibus Emergency Solutions Act] might extend that for another year."
When the client discussed this with Kaiyoorawongs, she advised that he call his loan servicer and ask that the money be returned to him. His own initial efforts proved futile. So Kaiyoorawongs got on a call with him and asked the person managing his case to look up the law.
"They put us on hold for about 10 minutes and then came back and told us we were correct and he was entitled to get his money back," she says.
Having experienced how impactful LoanSense was to his own financial situation, the client decided to invest $10,000 into the startup, which is actively seeking investors. Kaiyoorawongs has nothing but high hopes for the company's future. The LoanSense team has been busy working on online channel partnerships that will be rolled out by August or September.
She stresses that as LoanSense continues to grow, its goal will be unchanging.
"No matter what we do, we will always be committed to helping people make the best student loan decisions for themselves," she says.
For more Concentrate coverage of our community's response to the COVID-19 crisis, click here.
Jaishree Drepaul-Bruder is a freelance writer and editor currently based in Ann Arbor. She can be reached at firstname.lastname@example.org.
Photo courtesy of LoanSense.