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Social Finance, better known as SoFi, is a nontraditional financial institution that specializes in lending and wealth management. The San Francisco-based company offers student loan refinancing (low-rate consolidation loans to creditworthy applicants), mortgages (home loans and refinancing to qualified owners), and life insurance (term life insurance to be exact).
But SoFi’s services extend far beyond just loans and finance, and they’re shaking things up in a recent PR move. The popular lender recently announced a new initiative involving dancing and education.
Last Thursday, SoFi hosted a cocktail party for Millennials with Student Loan Debt. The event was complete with food, prizes, and a DJ. And the guests’ only cost of admission was an email, screenshot, or statement displaying their student loan balance.
Arthur explained that the purpose of the event is to celebrate students who invested in themselves by taking on student loan debt. Because these borrowers are working hard to be financially responsible they often don’t have access to these types of events…so SoFi will treat them to one. Members can gain professional relationships through these events as well.
SoFi’s target demographic is borrowers who are just getting started in what appears to be a successful career. These borrowers are usually recent graduates who are poised to do well in life. But due to their limited credit and job history as well as high student loan debt, they have a hard time getting jobs.
SoFi even has a name for these types of borrowers: HENRY’S. This stands for “High Earners Not Rich Yet.” According to Arthur, “The average member saves about $23,000…and we have all kinds of member services to help you accelerate your success.”
SoFi’s business model is unique because it aims to build a community and supportive network around lending. Their services include career support, an entrepreneur program, and member events across the country. These member events include activities like educational events, dinners, and pop-up dance parties.
Over 350,000 members have joined since SoFi’s inception in 2011. 35,000 members actively participate in events. Claire Arthur, who is a member of the SoFi Community Team, said that their biggest problem is trying to create new events to meet the high demand from members.
Despite all the positive press, SoFi has been in the news frequently for negative reasons. Their CEO and co-founder Mike Cagney stepped down in September due to accusations of sexual harassment. The company had just launched an investigation into reports of sexual harassment from both former and current employees.
In a letter Cagney wrote to his employees, he expressed his remorse that both “HR-related litigation and negative press have become a distraction from the company’s core mission.” Tom Hutton is currently serving as interim CEO until Cagney’s replacement is found.
Author: Mike Brown
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.