Quick-to-read HR news & insights
From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.
Summer, a workplace student loan solution, announced $9 million in funding on April 8. The fundraising round was led by Rebalance Capital and SemperVirens, which both focus their investments in part on workforce tech companies. General Catalyst, QED, and Flourish Ventures were also among the VC firms participating.
The fundraising round comes on the heels of news that Summer will partner with ADP to offer student loan retirement matching to the human capital management firm’s 401(k) clients. Summer has recently seen more interest and demand from employers for its products due to a number of factors, including the resumption of student loan payments in October, as well as a new federal provision allowing companies to tie student loan payments to retirement savings, co-founder and CEO Will Sealy told HR Brew.
“It is a major financial stressor that resumed,” Sealy said of student loan payments, which were paused for over three years before they restarted last fall. “Student loans are now boiling up as a top-two financial concern. And we haven’t heard about this for years.”
Tackling the “excruciatingly high cost of college.” Sealy co-founded Summer in 2017 after spending two years working as a student loan policy expert for the Consumer Financial Protection Bureau. While there, Sealy realized the federal government has designed myriad solutions to help Americans manage their student loan debt, but hasn’t made them easily accessible. Summer, he said, was founded with the goal of tackling the “excruciatingly high cost of college.”
To that end, one of the products Summer offers is a platform that helps employees navigate 120 different government assistance programs, such as income-driven repayment plans or public service loan forgiveness. The company also works with employers to offer tuition assistance, college cost preparation solutions, and employer contributions to student loans, in addition to student loan retirement matching. Summer charges a “per employee, per month fee,” with prices tiered based on employer size.
Sealy said Summer tries to think about the full spectrum of employee needs, rather than focusing on the narrow demographic of workers just getting out of college. “A lot of people hear ‘student loans’…they really think college students or people in their 20s,” Sealy said. “And the reality is, 50% of the people we’re supporting are over the age of 42.”
Looking to the future. Prior to this latest fundraising round, Summer had raised $18 million, including a Series A extension round totaling $6 million that closed last April. With the new funding, Sealy said he hopes the company can grow at a faster scale and potentially hire additional staff (the New York-based company already employs 40 workers). Summer currently works with about 800 employers, including TechSmith, Mattress Firm, and the American Diabetes Association, and hopes to support 12 times as many in the coming months, he added.