Paidly Raises Funds to Expand Student Loan Benefit Platform

Student loan assistance FinTech Paidly is expanding its platform following a new funding round.

The Series A round — no dollar amount was given — came in the form of an investment from S30Build, Paidly said in a news release provided to PYMNTS Tuesday (Dec. 10).

“This funding equips us to further support employers and employees as they navigate the complexities of student loan debt, resulting in improved financial wellness and increased job satisfaction,” said Paidly CEO John Scully. “We are committed to driving positive change and the investment from S30Build will help us achieve this goal.”

The release noted the $1.7 trillion problem of student loan debt in America, and the fact that the federal government in 2020 passed the Coronavirus Aid, Relief and Economic Security (CARES) Act, letting employers contribute up to $5,250 tax-free to student loans each year, with those funds tax-exempt for both the employee and the employer.

According to the release, Paidly’s cloud-based platform offers employers a streamlined way to establish and manage student loan benefit plans as a way to support employees as they repay their student loans, while addressing key workforce needs within their business.

“With an emphasis on improving employee quality of life, Paidly seeks to empower individuals to reach major life milestones — such as buying a home, starting a family, and saving for retirement — all while efficiently managing their student loan payments,” the company said.

In other student loan news, the Consumer Financial Protection Bureau (CFPB) said last month it is seeing cases in which student loan servicers are withdrawing incorrect amounts from borrowers’ bank accounts and making other payment-related errors.

“Unfortunately, autopay errors were one of the most widespread, basic and consequential servicer errors we saw this year,” CFPB Student Loan Ombudsman Julia Barnard told CNBC. “These errors are incredibly costly and completely unacceptable.”

The regulator said it received more than 18,000 complaints from student loan borrowers between July 1, 2023, and June 30, 2024 — the highest number since the CFPB began collecting such complaints in March 2012. The agency said it was lobbying for reforms that it said would improve student loan servicing.

“As the federal loan system undergoes rapid changes, it is crucial that servicers immediately address these persistent issues,” Barnard said in a news release. “Policymakers should ensure that student borrowers can access the loan cancellation and lower monthly payments they are entitled to and implement new accountability measures to fix these long-standing problems.”

Also last month, the CFPB reported that 63% of borrowers have difficulty making their student loan payments and that 37% have missed at least one payment.