Edmit announced last week that it would be providing a new service for students: It will pay for six months of loans for eligible students who don’t find a job within a year of graduation or make less than $20,000 a year. Known as the Edmit Guarantee, it coincides with Edmit’s current offerings, which help families make informed financial decisions around paying for college and what university is the best financial fit.
Edmit cofounder and COO Sabrina Manville said the company has been working with Vemo on the guarantee for the past few months.
“The Edmit Guarantee that we launched [Thursday] is an example of some of the opportunities that we see to bring the expertise that Vemo has together with our the students that we work with to create new products,” Manville said.
The six-month offering, Manville said, essentially expands the grace period private loan companies offer students following graduation before they need to start making payments, which is typically six to eight months. She added that while pricing is pretty opaque for the school itself, for many students choosing colleges and programs, it can be hard to factor in earnings data for specific majors. Some students choose colleges that are less expensive but have worse hiring outcomes, while others take on too much debt but expect to make more after college in high-earning industries like tech.
The guarantee begins when students apply for colleges. After putting in their major, potential university and how they intend to pay for it into Edmit, the system will tell students if they qualify for the guarantee. Currently, those students are being put on a waitlist for when the product officially launches in a few weeks.
“Edmit has always given advice, but this is the first financial product that we’ve worked on and, really, it’s our way of putting our money where our mouth is in terms of the advice that we give students and families of their considering college,” Manville said. “One of the things that we’ve observed working with thousands of families is that it’s really hard to figure out what college is worth it, or is this college worth it?”
In order to qualify post-graduation, students need to show that they’re actively looking for a job in their field. Manville added that being under-employed after college, or ending up in a job that doesn’t require a college degree and making less, can have long-term impacts on someone’s overall earnings in their lifetime. The guarantee aims to ensure that students can take the time to find the best job for them that will influence their career trajectory long-term.
In the acquisition announcement last month, Vemo and Edmit said that by increasing transparency and more accurately matching the cost of tuition with the job outcomes on the other side, they hoped to increase access and affordability in higher education. Although collegiate applications increased through the pandemic, Common App data shows that applications from students with household income low enough to have their fee waived dropped by 2% in 2020 and fell 3% from first-generation students.
“Both schools and students have to think about more than the front-end cost of a college education,” said Tonio DeSorrento, cofounder and CEO of Vemo, in a statement. “They have to think about job outcomes on the other side, too.”
On top of the transparency in education goals, Vemo also has plans to add 10 employees to the team, and DeSorrento told Washington Business Journal that the company is not looking for additional acquisitions but is open to the possibility.