Welcome to FinTech TV.
I'm Remy Blair.
While debt continues to be an underlying American issue, while the US government has amassed a national debt of over $37 trillion.
Individual Americans have also racked up significant dues.
Now US credit card debt rose to $1.21 trillion in Q2 of 2025, while student loan debt climbed to 1.81.
T1 trillion dollars and 42.5 million Americans hold the student loan debt with people aged between 35 and 49 holding the most debt.
That's where yellow funding comes in.
Yellow funding was named Student Funding Company of the Year in 2025 for its commitment to transparency, fair terms, and strong student support.
The company's goal will break the cycle of rising tuition.
Costs by offering a more accountable, sustainable approach to education financing.
Joining me today to break down how yellow funding is transforming loan repayment is Daniel Rubin, CEO of Yellow Funding.
Daniel, welcome.
Thank you so much for joining me.
Thank you.
Thank you very much.
Nice to be here.
Well, it is back to school season, so tell us about yellow funding and why this business model.
Yes, yellow funding, we're a fintech company.
We're US based, don't get fooled by my French accent.
Uh, we are based here actually in New York City and what we do, we provide gap financing to college students, meaning financing after they've exhausted all their federal loans, scholarships, grants, when what's left to pay, we come in.
And where we unique, as we said earlier, we finance education in return for a portion of a student's future income, right, so payments are not fixed.
They are tight to earnings and for students it's great because it's more affordable, more flexible.
We have great features in our program.
Payments are capped in a month, in time, APR, so we give them a lot of predictability and we remove a level of stress, right, because when you start your career and you have $500 monthly payments as your loan $500 might be a lot, but you know down the road it might be less here for us because we take a fixed percentage of their salary, it's always very affordable for them.
What we the way we set up our program is We really finance students based on their value of the program, the ROI of the program.
It's not about their socioeconomic background.
It's not about where they come from, their past.
We really invest in the students.
We invest in their future, yeah, and education is key in all aspects here.
When we think about the price tag for tuition, it continues to creep higher.
So how is what yellow?
Funding is doing.
How is it different from competitors?
We have created an education bubble over the years.
If you step back a little, what happened was that for I don't know 40, 50 years, the past 4, 50 years, we've encouraged students to borrow tens or even hundreds of thousands of loans to finance their education, telling them, hey, this is your path to Middle class or even upper class, right?
But the problem with that business model is that we've created an inflated demand and it was, you know, the prime was the uh the government, right?
Easy credit, easy money.
They were not doing any underwriting.
Uh, virtually no underwriting.
So college they were in a great position, right?
They set up the price they wanted for for uh for the program and tuition just kept kept going up, going up, going up, and now, you know, like if you look for the past.
5 years tuition has increased by more than 1,300%.
That's 1,300%.
It's 4 or 5 times CPI.
When you have a $250,000 sociology degree from a mid-tier university, that's not an asset, that's a liability.
That's a subprime loan, right?
It's.
Right now because there is a disconnect between the expected income, salary you're going to get and your cost of education, a lot of students are getting in trouble.
You have already, according to the Department of Education, 5 million students have already defaulted and probably 10 million will default by your end.
So where we come in at year funding is we say, OK, you know what, we are going to finance education based on the value of the program.
And when you come on our website, if we don't finance you, if you decline, you know, it's a two minute pre-approval process, that means that It's not because of your socioeconomic background, your race, religion, sexual orientation.
This doesn't matter your past.
It's bad because we think that you're not going to be able to repay us.
And if we think we're not going to be able to repay us, maybe you should think twice about studying that in that major.
When you're trying to determine ROI for different types of degrees, can you walk us through how you actually do that?
Yes, we look at the how much we make post graduation.
What's the probability of getting a job in your major now, you know, I don't want to sound that we're financing just computer engineering program or finance program or business program, right?
We we finance English major, we did finance English major or social work or nursing major. we need English teacher, but the way we look at it when I talk about RI is.
If you want to be an English teacher, that's great, but you don't need to spend $250,000 to become a great English teacher, right?
So the ROI, it's about how much it costs.
And how much you would earn and that almost sounds like a conversation that we might hear from a college student and their parents if the child actually wants toursue that English degree, perhaps, yeah, no, exactly, and we encourage that, but what I think we are going to do in the long term is we are going to bring back.
Market to reality right now we are living in a fantasy world where tuition are totally disconnected from reality.
But if we companies like us, we start financing just the majors that make sense in major it's the college that makes sense, then prices will adjust, right?
It's the basic. of supply and demand and this needs to be adjusted.
We've gone too far for too long where colleges, like I said earlier, they just set up the price that you want.
I have 3 kids in college, OK.
They all went to a not for profit private college and the problem here is that it doesn't matter.
What you study, everyone pays the same price because you pay by credit, but it doesn't make sense, right?
Speaking of which, Daniel, how do you expect to see the student loan industry actually evolve here in the US?
So look, A couple of months ago, President Trump has a big beautiful bill.
And in it it's a big bill, 900 pages, right, but there are 60 pages, 70 pages on on the on the student financing.
And finally there is a realization that you know what, it's time to turn off the faucet.
So all of this bill restructure the student financing system, parent plus loan are capped, grad plus loan are to eliminated.
Federal loans for grad students are also cap to loans that students can borrow is capped, and what's going to happen now is that there is a huge market that the government was in.
We're talking about early estimate $15 to $20 billion that now will be in the hands of private lenders.
Last year student private loan origination was on private.
Just private was $13 billion.
13.
We're talking next July, the market more than doubling when this bill comes into effect.
So there's going to be a huge shift, a huge tsunami coming in in the private market and Everything for the better.
And finally, Daniel, I do want to ask you, building on what you just said, how is yellow position to take advantage of these changes?
Yeah, we, we are one of the few that provide federal loans like financing.
We are outcome-based again.
Based on fixed payment, if we provide deferment, if you are unemployed, if you face economic hardship, payments are posted compared to other private lenders that we you know you still have to pay.
So really we are here in we're very lucky we're in the right time right place in the right time and here we are going.
To take this advantage of becoming the leader in that specific industry, that's nascent industry, the outcome-based student financing, and we're going to help students.
We're going to create this new asset class within the consumer loan industry for our rest of our investors.
This is a great time to finally be. part of something big but also socially responsible, right?
And we, I don't know if we are the answer to the problem, but definitely the beginning of an answer.
Well, Daniel, I appreciate your time.
Thank you so much for joining me here at the New York Stock Exchange and sharing the story of yellow.
Thank you very much.
