Student loan borrowers have looked to student loan refinancing as a measure to reduce their financial burden. However, refinancing existing student loans with a lower interest rate may lower the financial burden to some degree but it does not eliminate the inherent danger of debt that manifests during financial duress. Defynance has developed a solution that eliminates this danger by eliminating the root cause, the compounding interest. 

Once a student debt holder applies and is approved, Defynance pays off their student loan and replaces it with an income-sharing solution that offers always affordable payments with a fixed term. Let’s understand in more detail how the Defynance solution eliminates the dangers associated with student debt and interest: 

Financial Freedom 

Since student debt is paid off and eliminated from the get-go, Defynance customers can focus on career growth, generating wealth, and their families. They can buy a home, start a family, or even save and invest for a rainy day and retirement. They do not have to worry about compounding interest, or the stressors associated with it.  

Affordability 

Contrary to student loans, Defynance ISAs are customizable as the repayments are tied to your future income instead of a fixed payment based on the interest rate. The obligation to share income ends once the payment term expires irrespective of whether the total payments made are equal to, less than, or more than the amount originally financed.  Plus, how Defynance determines the income share percentage is not pegged to interest rates so the Defynance solution may be even more affordable in the current climate of rising interest rates. 

Flexibility 

Defynance ISA is built keeping in mind that life is not predictable; it is rife with uncertainties. In case of job loss or income falling below a minimum threshold, Defynance automatically pauses payments and proactively works with customers connecting them to their career support resources to find a job, optimize income, and even upskill if required.  Defynance also allows for discretionary deferment pausing payments if life necessitates it like after having a baby or to take care of an ill family member. 

Winning Together 

Not only does Defynance share downside risk, but it also provides various ways to lessen overall payments if income increases significantly.  The career support resources can be an asset in helping to optimize income.  Other features like a payment cap end the income sharing agreement early if income increases significantly.  Prepayment provisions allow for reducing the payment term one month at a time.  Buyout can be exercised to end the agreement at any time with a one-time payment.  Finally, the self-equity mechanism provides greater cash back the better one does in their career.

Focus On Your Future 

The very purpose of Defynance ISA is to empower financial freedom. By eliminating debt, Defynance frees customers to focus on their future, both professionally and personally. By minimizing financial stress, Defynance customers can prosper in their careers by making the right choices instead of choices made under the pressure of student debt.   

The seemingly ever-growing student debt crisis is raising alarms across our nation.   Here at Defynance, we understand that we can’t force the government or other macro forces to act but we can make a difference in every customer’s life and career by removing student debt from day one. So come and insure your future by refinancing or replacing your student loan with the Defynance income-sharing solution.  

Make it your next step towards financial freedom! 

Last week, an organization called Jobs for the Future (JFF) released the results of a statistical study they undertook to investigate whether or not Income Share Agreements (ISAs) reflect either a racial or gender bias in the distribution of their use. The report concluded that there is no bias in terms of race or gender. 

For those of us working on creating more access to higher education and equal economic opportunities with ISAs, this conclusion does not come as a surprise! 

Before commenting further, in the interest of transparency, let’s briefly review what the JFF did and how it conducted the study. First, the JFF used 7,639 ISAs that were active between 2018 and 2021. Some of the ISAs were new, others were in their repayment period. Now the caveat: Normally, in any financing endeavor, the financier is prohibited from collecting racial or gender data that can be tied directly to that application. That is, you can collect data during the process and save it in “bulk” to be reviewed later – but you cannot have it in a place where it could be seen by someone making the financing decision. The ISA data used did not have gender or race data, so that data was assigned to each ISA by using statistical methods. In fact, the JFF used several methods for assigning the same data, i.e., they used 3 different methods to assign race to have repeated confirmation of the assignments made. 

In the end, as we’ve said, the study concluded that there was no statistically significant relationship between race and/or gender and the key contract terms they were offered! 

Again, this is not surprising.  

ISAs themselves are not living, breathing entities. They don’t think – therefore they do not form opinions and then biases or prejudices. Humans do that. Granted, this study could have found that bias does exist. But that is not a reason to cast doubt on ISAs as instruments – it only calls into question the equity of the financial system as a whole. The same bias that could exist in ISAs could also exist in mortgages and car loans. The instrument doesn’t decide, the lender does, whether through personal decisions made based on bias or through using algorithms that contain inherent bias. 

The DefynanceISA product offers a fairer approach to financing higher education. By setting the monthly payment to a percentage of income, the Defynance ISA actually reduces bias by giving people – especially African Americans and Latinx and women, who are undoubtedly subject to bias in incomes – a more affordable way to repay the debt they incurred while attending college.