Founder's Five + Higher Ed
Founder's Five + Higher Ed
Founder’s Five is a continuing series from Tyton Partners that invites education company founders to shed light on their own success and illuminate the landscape for other education entrepreneurs and investors by answering five basic questions.
Peter founded Ardeo in 2008 to act as a service provider for colleges and universities interested in offering LRAPs to their graduates. LRAPs are a mechanism for institutions to provide education loan repayment subsidies to their graduates whose post-grad incomes fall below a certain threshold. This provides a way for schools to instill confidence in their programs, promote specific career options – like teaching in underserved communities – or to encourage certain student populations – like first generation students – to enroll.
Ardeo’s services are currently focused on undergraduate programs at private, non-profit universities; but the company plans to expand to public institutions and graduate education soon. Ardeo has partnered with more than 200 institutions in support of more than 25,000 students. It is a public benefit company backed by angel investors.
In surveys every year, about a third of students say they don’t go to the college they want to because of cost. And that was my story. I really wanted to go to Wheaton College. They admitted me and I couldn’t afford it. I had a much better deal at Greenville College, but it wasn’t where I wanted to go. In law school, it repeated. I wanted to go to Yale Law School, and Chicago offered me a lot more money. Steve Yandle, who started the LRAP program at Yale Law School discovered he could offer kids like me $20,000 less aid and we would still show up. So, he won head-to-head competitions with Harvard and Stanford at a huge discount because he had this LRAP program. He promised that if your income is low, we’ll make your loan payments — go do anything you want in life. So that’s why I was able to do human rights work in Hong Kong, because they were making my loan payments, which was fantastic.
And then a few years later, I joined the board at a small college, and we had the same problem Yale had; we’d admit four kids to get one to show up. The marketing is working, people are applying, and then they just don’t matriculate. So why don’t we make the same promise? If your income is low, we’ll make your loan payments. But the college couldn’t do it; they didn’t have the bandwidth. So, I thought, let’s build the program, sell it to colleges, and let them give it to students. It’s essentially student loan insurance. Let’s go out there and find an insurance company and put it together.
There are nonstop news stories about how students are worried college isn’t worth it.
When we are successful, students will know college is worth it, they will have a guarantee that says if your income isn’t adequate, we’re going to make your loan payments, or help you make your loan payments.”PETER SAMUELSON
The media just tells the story so wrong about how expensive college is. And we will correct that. And students will be free to go where they want to go to college. They’ll be free to study what they want to study. They’ll be free to follow the career they want to follow without fear that debts will hold them back or penalize them unduly.
We use a tool that has made a huge difference in our recruiting. Predictive Index is a personality survey that takes only about 10 minutes and it’s a shortcut to getting to know the person and is fantastic in the interview. If the person is an introvert, you know that interviewing is not their strong suit; or not to be overly impressed by an extrovert’s interview skills. And then you can customize the job to fit a candidate once you’ve hired them. Often there’s 10% of the job that doesn’t fit a person, and this just helps you see what part of this job isn’t going to fit; it’s a great tool. A lot of people will think it’s a test, but it’s not. It’s just a really effective personality profile that gives you actionable insights to think about how this person will relate to other people in your organization. And that just shortcuts hours and hours of getting to know them.
How bad the media is at covering how much college costs. We’ve sponsored a project we call College Is Worth It, where we put out a PowerPoint and a white paper on this topic. On average, media stories talk about students with $94,000 in education debt. That’s just not true. The average student comes out with $37,000 in debt. The people with $100,000 in debt are there, but they’re not bachelor’s graduates, they’re lawyers and doctors. No one is worried about them paying off their debt. It’s malpractice by the media to represent that college graduates have $100,000 in debt and it really changes how people think about where they should go to school. And that’s just unfortunate.
I love what Jason Lemkin is doing with SasStr. He’s got the best content for entrepreneurs if you want to learn how to build a business. We are not a SaaS company, but we’ve got recurring revenues. So much of the content he puts out is provocative for my executive team. It helps spur good discussions about where we are in our stage of growth and how should we think about this or that position. We just really love the stuff he puts out there freely to the community. It’s fantastic.