I didn’t come from a lot of money. In fact, I grew up quite poor.
When it came time for College, I found out that I was accepted to Columbia University. This was exciting, but it also caused me some concern.
See, Columbia is considered one of the best colleges in the country—
But it’s also one of the most expensive.
Despite the enormous cost, I decided to attend.
How did I pay for it?
Like many young Americans, I took out student loans.
A LOT of them.
By the time I graduated, I was $160,000 in debt.
It was a financial burden that weighed on me for years. It kept me from doing many of the things that young people dream of, like buying a car or a home.
Although things eventually worked out for me and I was able to pay off my debt, many recent graduates haven’t been so lucky:
In the last few years, the level of student loan debt in the U.S. has spiraled out of control. It’s now surpassed $1.2 trillion.
But now a new crop of young companies is aiming to change America’s education and student loan system...
And some of the most successful investors in the world are backing them.
Today, we’ll show you a few of their most innovative plans—
And tell you how to get in on the action.
The Education Technology sector (EdTech) has been growing steadily over the past decade.
Since 2005, the number of start-ups entering this market has grown by over 800%.
Initially, these start-ups helped existing schools modernize their offerings...
For example, a company called Blackboard helped colleges move their course materials onto the Internet.
Blackboard grew very quickly—and was eventually acquired for $1.65 billion.
But the EdTech sector has evolved greatly since those early days:
Its aim used to be supporting existing institutions—now its goal is replacing them.
Next Generation of EdTech
Have you ever heard of Khan Academy?
It started out as a hobby for its founder, Salman Khan.
He’d post videos to YouTube explaining different college-level topics, from calculus and economics to American history.
Before long, thousands of people from around the world were watching his videos—and today, his free website is visited by more than 10 million people each month.
Then there’s a site called Lynda.com: in exchange for a monthly fee, this site teaches practical skills, like how to use Adobe Photoshop or Microsoft Excel.
Last month, Lynda was acquired by LinkedIn—for $1.5 billion.
But now start-ups are seeking to further disrupt the education space...
For example, just this week it was announced that Facebook’s CEO, Mark Zuckerberg, and his first investor, Peter Thiel, would be investing $100 million into a new EdTech start-up called AltSchools.
Simply put, AltSchools aims to change how children are educated in America. Its focus is on personalized learning—something that’s been lost at most schools today.
To achieve its vision, the company builds and runs its own set of K-12 schools.
Meanwhile, instead of focusing on education itself, a number of start-ups are aiming to change how education gets paid for.
And not only do these start-ups helps students—they might help you, too...
How YOU Can Get in on The Action
One such start-up is called SoFi...
SoFi provides students with an alternative source of capital to fund their loans: capital from investors like you.
Here’s how it works:
You—and many others—lend small amounts of money to students and recent grads.
Just like with LendingClub (NYSE: LC), by eliminating the banks as middlemen, the borrower pays less interest, and you receive market-beating yields.
If you’re aiming to generate current income, you can visit SoFi here »
If, on the other hand, you’re seeking more aggressive “growth” in your portfolio, take a look at the Education Technology Syndicate on AngelList.
The basic structure of these syndicates allows you to follow a reputable investor into a specific deal—someone who’ll help do due diligence and negotiate for you.
The syndicate I mentioned focuses on promising EdTech start-ups—the types of companies that might one day turn into $1 billion acquisitions. You can learn more about it here »
Please note: Crowdability has no relationship with AngelList or SoFi. We’re an independent provider of education, information and research on start-ups and alternative investments.