According to the Millennial Disruption Index, 71 percent of all millennials would rather go see their dentist than deal with their bank.
Not surprisingly, that’s “my favorite statistic,” says David Klein, CEO and cofounder of CommonBond, a graduate student loan refinancing company.
CommonBond has come a long way since its beginnings as a pilot program in 2012. At the time, Klein was a graduate student at Wharton Business School in Philadelphia, and like most of his peers, he was dealing with the labyrinthian student loan process to finance his education.
“The rates were unnecessarily high,” says Klein. “The process was unnecessarily complex and to kind of add insult to injury, the level of service that was provided throughout the process was quite poor.”
Klein teamed up with his classmates Michael Taormina and Jessup Shean to launch CommonBond, which saves its average borrower about $10,000 over the course of repayment.
CommonBond also provides a high level of customer service. The company periodically sends customized gifts to its borrowers and hosts borrower dinners in cities across the country where its clients can meet each other and the lending team. Klein says this seemingly novel approach to finance is actually a throwback to the way banking used to happen, when small-town Americans would have personal ties to their bankers. Soon, CommonBond wants to apply this approach to other financial needs, such as mortgages and personal loans.
Perhaps most important, though, is what CommonBond dubs its “social promise.” Partnering with the organization Pencils of Promise, which provides education to underserved students in developing countries, CommonBond funds a year of schooling for a needy child for every degree fully funded through its platform. In 2014, this meant $50,000 went to the nonprofit. In 2015, CommonBond expects to give up to $250,000.
Prudent business practices are important, but customer appreciation dinners, being responsive to borrowers’ needs and supporting education around the world demonstrate what CommonBond stands for. “Business can and should have a positive impact on social change,” says Klein.