Flywheel Fund Launches Innovative Pilot Fellowship with Stanford Law School to Enable Greater Diversity of Career Choice by Reducing Impacts of Student Debt
Flywheel Fund Launches Innovative Pilot Fellowship with Stanford Law School to Reduce the Burden of Student Debt on Career Choice – Empowering More Students to Pursue Public Interest or other Lower Income Careers
- Fellows receive up to $170,000 for JD tuition and expenses
- Income-based repayments – Stanford commits to cover repayments for Fellows who earn under $100,000 per year; higher income earners will pay a percent of their income (but never more expensive than federal Grad PLUS loans)
- Fellow repayments, Stanford contributions, and donors will fund future Fellows
September 15, 2022 (Palo Alto, CA) – The Flywheel Fund for Career Choice (“Flywheel Fund”), a new nonprofit created to help innovative solutions to America’s student loan crisis, today announced the launch of a pilot program with Stanford Law School to reduce the debt burden for graduates who pursue public service or other lower income careers. The Fund will empower students to select careers focused on impact, mission, and interest, rather than salary. Stride Funding, Inc., a leading innovator in higher education funding, has been instrumental in developing the initiative and will serve as the program administrator and manager.
“The Biden Administration’s student debt forgiveness program highlights that the status quo in education finance is both politically and economically unsustainable. Too many graduates feel compelled to prioritize income over impact as a result of the heavy burden of student debt,” said Elliot Schrage, Chairman of the Flywheel Fund. “We created the Flywheel Fund to address the perverse incentives in our current system of financing education, introducing a new model that empowers some of our most talented law school graduates to commit their time and talent to mission-oriented careers freed from the financial pressure of debt repayment.”
The Flywheel Fund’s novel approach to funding higher education invests in students upfront, links repayment to future income, and recycles funds repaid by each cohort of Fellows to finance the education of the next. The Fund aims to grow opportunities for those who have ever considered pursuing public interest or public service opportunities. Program fellows will not only have the freedom to pursue less lucrative careers with financial support from Stanford but also the assurance that repayments will never exceed the cost of Grad Plus Loans offered by the federal government.
Under the terms of the pilot, the Fund will provide up to $170,000 in law school tuition and fees for a group of Flywheel Fellows. Fellows will enter into a “Flywheel Income Share Loan” (FISL), provided by Stride Funding, that seeks to give them the greatest possible freedom to choose diverse career paths post-graduation. The program will award up to 20 Fellowships commencing in Fall 2022.
Unlike traditional debt, repayments to the Flywheel Fund are contingent upon the Fellows’ income, with the total amount of repayment capped by federal student loan standards. The Program offers generous benefits tailored to the financial circumstances of Fellows. Under the terms of the Program:
- Repayment will not begin until after employment is secured.
- If Fellows earn less than $100,000 per year, Stanford has agreed to make all payments on their behalf as part of an expansion of its existing Loan Repayment Assistance Program (LRAP) and to make partial payments on behalf of Fellows earning between $100,000 – $115,000 per year.
- If Fellows don’t get a job after graduation, they don’t pay anything at all.
- No Fellow will EVER repay more than they would have if the Fellow had taken out a Grad Plus Loan. – currently 7.54% APR.
The percentage of income owed by Fellows stays the same, but monthly payments may increase or decrease depending on a Fellow’s income and Stanford’s contribution. If a Fellow earns a high income, a total payment cap will limit how much they are required to pay. No payments will be owed on income over $18,750 per month ($225,000 annually), protecting even the highest earning Fellows from onerous repayments.
“We were the first to design and adopt an innovative loan repayment assistance program in the ‘80s that has become the standard across law schools. I’m proud of the fact that Stanford Law School is again taking the lead in testing new programs that can benefit our students” said Jennifer Martinez, Richard E. Lang Professor of Law and Dean of Stanford Law School. “Piloting a potentially innovative new model for financing a legal education is part of our overall efforts to support diversity among our students and in the careers they are able to pursue. We are grateful to the Flywheel Fund for approaching us to work with them and providing the financial and technical support to launch this pilot program together.”
RJ Vogt, a current Stanford Law School student, said, “The burden of loan debt drives students towards high paying jobs over the public interest work that often brought us to law school in the first place. This is especially true for first generation and low-income students like me, who are nervous about owing these huge sums of money that rapidly grow, with interest. The Flywheel Fellowship alleviates that pressure.”
Stride Funding, the provider of the FISL, is an award-winning company whose mission is to make education affordable and accessible through flexible forms of financing that opens doors and gives power to learners. “We are thrilled to work with Stanford Law School and the Flywheel Fund to bring this innovative program to life. The program represents a win-win-win for Fellows, Stanford and society–as Fellows are free to pursue careers of impact, Stanford delivers on its mission and mitigates the constraints caused by traditional student debt, and the American public gains incremental talent into high impact, but lesser compensated, areas of law. Moreover, because the non-profit fund is replenished by repayments, every one of today’s Fellows funds tomorrow’s Fellowships–hence the “flywheel” ,” said David Kafafian, Stride Funding’s Chief Operating Officer.
The Fund and Stanford are committed to studying the success of the program to understand the factors that shape career selection decisions and to reporting regularly on participation, performance and outcomes. Ralph Richard Banks, Jackson Eli Reynolds Professor of Law at Stanford Law School, the co-founder and Faculty Director of the Stanford Center for Racial Justice, will serve as research advisor to the pilot project. “A significant percentage of applicants to Stanford Law School express interest in pursuing public interest or public service careers as part of their applications, but far fewer – less than 25% in fact – take such jobs after graduation or clerkships. This project will help us understand the role debt plays in career decisions and redesign education finance programs to promote greater diversity of career outcomes. If the program can realize its ambitious objectives, it will offer a new and sustainable model for financing higher education and advancing the public interest.”
The non-profit structure of the Flywheel Fund assures that ongoing repayments by Fellows and continued contributions by Stanford’s LRAP will multiply the impact of donor dollars, so that more Fellowships can be offered in the future. If successful, the pilot aims to become a permanent, sustainable program and serve as a model that can be replicated at other law schools and, perhaps, across different types of higher education institutions.
More information about the Fund and the Program can be found at http://www.flywheelfund.org.
For more information contact
For Flywheel Fund for Career Choice:
(202) 270 -1848
For Stride Funding, Inc.:
908 – 472 – 7777
About The Flywheel Fund for Career Choice
The Flywheel Fund for Career Choice is an innovative non-profit organization created by alumni of Harvard and Stanford law schools, that seeks to expand career choices for law school students, enabling them to pursue public service or other lower income careers more quickly after graduation. Stanford does not endorse the Flywheel Income Share Loan. The Flywheel Fund is not affiliated with Stanford University nor Stanford Law School. Learn more at http://www.flywheelfund.org
About Stride Funding
Stride Funding, Inc. is a mission-driven company that helps students hit their stride–with flexible educational funding. Stride Funding offers affordable repayments with income protection. The company has been recognized as a visionary leader by FinTech analysts for its innovative funding arrangements and commitment to career support. Learn more at www.stridefunding.com.