Susan Ehrlich: Leading Change in Student Lending at Earnest
Introduction to Earnest
Susan Ehrlich stands at the helm of Earnest, a San Francisco-based lender that has been reshaping the landscape of private student loans and refinancing since its inception in 2013. With a mission to provide accessible financial solutions, Earnest offers a range of products including undergraduate and graduate loans, co-signed loans, and specialized loans for medical, law, and business schools. The company has garnered attention for its innovative approach, including a nine-month grace period—longer than the industry standard of six months—and a commitment to zero fees for origination, disbursement, prepayment, or late payments.
Innovative Technology and Consumer-Centric Approach
One of the standout features of Earnest is its use of technology to streamline the loan application process. By leveraging software that matches consumers with potential loans without impacting their credit scores, Earnest aims to simplify what can often be a daunting experience for students and graduates. Ehrlich emphasizes that the traditional student loan system is outdated, likening it to "Windows 95" in a world where students are accustomed to modern technology. This perspective drives Earnest’s commitment to creating a user-friendly experience that prioritizes consumer education and understanding.
Ehrlich’s Journey to Earnest
Before taking the reins at Earnest, Ehrlich amassed a wealth of experience in the financial sector. As the former CFO at Simple, one of the earliest mobile-first neobanks, and a consultant at LendingClub, she has a deep understanding of consumer finance. Her previous roles also include managing credit card programs at Amazon and leading financial services at H&R Block and Sears/Kmart. This diverse background has equipped her with the insights necessary to drive meaningful change in the student loan industry.
Addressing the Broken Student Loan System
Ehrlich identifies the current student loan system as fundamentally broken, with an estimated 19.7 million students attending college and relying on a confusing mix of scholarships, federal aid, and private loans. This complexity contributes to the staggering $1.7 trillion in student debt carried by one in five adults in the U.S. Recognizing this challenge, Earnest launched its private student loan product to provide a more straightforward and transparent option for students. The company’s focus on user research and design has led to a product that not only meets the needs of borrowers but also empowers them with knowledge about their financial decisions.
Diversity and Inclusion in Leadership
Ehrlich is passionate about fostering a diverse workplace, believing that varied perspectives enhance the company’s ability to serve its customers effectively. At Earnest, 33% of the C-suite is comprised of women, and overall, women make up 43% of the organization. This commitment to diversity is not just about representation; it’s about creating a culture that values different viewpoints and experiences. Ehrlich points to studies indicating that companies with diverse leadership perform better and are more innovative, making a strong case for the importance of gender diversity in the fintech industry.
Modernizing Student Loans
Earnest differentiates itself from traditional lenders by modernizing the student loan process. The company’s focus on education and transparency is evident in its application flow, which includes clear definitions of terms like APY and allows co-signers to participate directly in the application process. By investing over 300 hours in user research, Earnest has developed a product that addresses real pain points, making it easier for students to understand their options and make informed decisions.
Mentorship and Closing the Gender Gap
Ehrlich is also a strong advocate for mentorship as a means to close the gender gap in the workplace. Recognizing that many employees lack access to formal mentorship opportunities, Earnest has established a mentorship program designed to connect team members with senior leaders who can guide their professional development. Ehrlich shares a personal success story about her first mentee, who has since risen to become the head of operations at Earnest, illustrating the program’s impact on individual careers.
Looking Ahead
As Earnest continues to innovate and expand its offerings, Ehrlich remains focused on the company’s mission to help students and graduates achieve financial wellness. With a commitment to diversity, technology, and consumer education, Earnest is poised to lead the way in transforming the student lending landscape for future generations.