Student loan debt tops $1.7 trillion in America, with the average borrower owing almost $40,000. With the student loan repayment pause ending in 2022, millions of borrowers will have to face paying back their loans. For example, 60% of federal borrowers are in deferment due to the payment pause and will need tools to help them with forgiveness. This brings with it additional layers of difficulty when it comes to student loan forgiveness.
Many large student loan servicers divested their student loan portfolio in the past year, leaving hundreds of thousands of borrowers with a new servicer. Most borrowers weren’t aware of this change and didn’t know who their new servicer was, making it extremely difficult to access their accounts in order to determine if they are eligible for student loan forgiveness.
Chipper looks to transform the student loan landscape by seamlessly helping users determine eligibility and enroll in a student loan forgiveness program. Chipper offers simple tools that help borrowers understand, manage, and pay down their debt. While developing these tools, Chipper searched for innovative, comprehensive ways to simplify onboarding and helping millions of borrowers with an infrastructure that would make the forgiveness process a one-click solution. However, linking users’ student loans and providing a seamless forgiveness experience posed some key challenges:
- Poor loan servicer coverage. Many borrowers don’t know who their servicer is or the credentials they used to sign up for their account, since it was set up years ago when they were going through college. Additionally, incumbent screen scraping solutions supported only a limited number of loan servicers, providing a 25%-50% coverage of the student loan lender market.
- Linking users’ student loans. Previously, users had to connect each of their individual student loan accounts using a tedious credential-authorization method. In other words, they had to log into each one of their accounts to view balances and payment dates. On average, a borrower held loans with 3-4 servicers, and while connecting every single account, Chipper saw 5%-10% loss in users for every incremental loan that needed to be linked.
The available loan linking processes, prior to Method, were not only time-consuming for the user, but it made for a poor user experience leading to drop off and account connectability issues. - Tony Aguilar, Founder & CEO
After speaking with a number of vendors, Chipper came to the conclusion that Method’s integrated data stack provided a seamless way to onboard users with just their phone number and get visibility into the entire users’ debt stack along with every student loan servicer that the user held their loan with.
Additionally, the direct connections with all student loan servicers will enable Chipper to retrieve real-time student loan data straight from the lenders. This allows Chipper to offer users transparent options and a personalized path to tackling their loans, ensuring borrowers don’t lose the financial progress they’ve made paying off their loans and continue to live the lifestyle they deserve.
The quick integration allowed Chipper to provide a uniform seamless experience for easy and secure student loan bill payment. Method’s value proposition of a turn-key solution was straightforward. Method’s API provides:
- One-auth connects all student loans. The ability to locate a user’s student loans using just their name and phone number, essential in a time when many users don’t know who their new servicer is.
- Expanded coverage. With Method, Chipper can connect student loans at 20+ lenders, which covers 95%+ of the student loan lender market.
- Stable and evergreen connections. Users no longer need to re-authenticate — all of their information is immediately available and the connection is evergreen. Chipper is able to utilize this connection for future products, including repayment, round-ups, or cash-back.
These features enabled one-click forgiveness application at Chipper, offering users simplicity and ease to connect their loans.
In the two months since partnering with Method, Chipper has connected 10,000 users and processed forgiveness applications for $150 million in student loan debt.
Chipper is a simple app that helps users optimize and chip away at their student loan debt faster than traditional repayment methods. A comprehensive digital solution for student loan borrowers, Chipper’s algorithm identifies options for repayment, management and even loan forgiveness tailored to individual users. With a mission to empower student loan borrowers to make smart decisions and alleviate the burden of enormous debt, Chipper provides an authentic pathway to success and financial wellness.
About Method Financial
Method Financial is an embedded banking service that allows developers to easily retrieve and pay any of their users' debts – including credit cards, student loans, car loans, and mortgages – all through a single API. Method manages the entire data retrieval and money movement process, keeping its customers out of the flow of funds, by handling compliance requirements, identity verification, and bank partnerships. The API provides access to 15,000+ lenders in the US, covering 95% of consumer debt.