This startup just raised over $330 million to help students pay off college loans

Americans are more burdened by student loan debt than ever before. The average Class of 2016 graduate has $37,172 in student loan debt, up 6% from last year.

While tough news for students, this represents an opportunity for student loan focused lending startup CommonBond.

The firm announced over $330 million in new funding on July 19, 2016.

The capital is a combination of equity capital to fund operations and lending capital to fund loans.

Neuberger Berman Private Equity led the $30 million Series C funding round, joining existing investors August Capital and Tribeca Venture Partners, among others.

High profile investors in earlier funding rounds included former Citigroup CEO Vikram Pandit, former Thomson Reuters CEO Tom Glocer and former Barclays Private Wealth CEO Tom Kalaris.

CommonBond will use the new equity funding to hire across the organisation and build out its technology platforms, according to CEO and co-founder David Klein.

CommonBond also announced $300 million in loan purchases by a leading global asset management firm, the proceeds of which will be used to fund new loans. With the new funding, CommonBond will surpass $1 billion in financing across equity and debt.

The start up has also acquired student loan company Gradible with the goal of building out a new student loan repayment platform that will enable companies to help their employees pay down student debt. This acquisition will power a sort of “401k platform for student loans,” an additional perk employers can offer employees to attract top talent to their teams.

Startups like CommonBond, SoFi, and Lending Club have gained traction in the student-lending arena by seeking out qualified borrowers and marketing refinancing products.

CommonBond has gone out of its way to tap into the most reliable segment of student borrowers — graduate students — instead of undergrads.

The emergence of these lenders has come at a time when banks are scaling back from the student lending arena and student debt has been skyrocketing.

Government grants and support for college have failed to keep pace with increases in costs. This has increasingly shifted the burden of paying for college from federal and state governments to individual families.


5 Top Fintech Predictions by the BI Intelligence Research Team. Get the Report Now »

NOW WATCH: Billionaire private-equity CEO David Rubenstein says Britain will almost certainly go into a recession and the US may follow

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.