David Klein is the CEO and Co-Founder of CommonBond, a student lending platform that stands for savings, simplicity and social good.
1. CommonBond is fixing the student loan market. On a personal level, why is this important to you?
I was personally affected by a broken student loan market. When I went to business school, I had to pay my way, and given the cost, that meant taking out loans. When I was researching my options, I was surprised with how high fixed rate financing was on student loans. I also thought the high cost was unnecessary. So I mustered the entrepreneurial ambitions that ushered me into business school and decided to focus on creating a better student loan experience through savings, simplicity, and social good.
I’m fortunate to have met my other operating co-founder, Mike Taormina, at business school and it was then that I discovered that he too experienced the pain of expensive and complicated student loans. We decided to commit our lives to fixing the problem in November 2011. A year later, in November 2012, we launched our first low cost loan and refinancing program at the business school where we met. Almost a year later, here we are, on the heels of announcing a large financing round to directly fund and refinance graduates’ student loans.
2. Surely, you didn’t envision when starting as an MBA candidate at Wharton that your education experience would catapult you into starting your own company. On Day 1 of business school, what did you think you’d be doing 2 years later?
Actually, that’s why I went back to school – to start a company and run it before graduating.
That said, and to be frank, it’s not like I thought the odds were in my favor. While starting a company from school was my goal – and while I focused manically on it and spent more hours and sleepless nights than I care to admit in service of that outcome – I never knew how real it would be until it happened. But I guess that’s what #startuplife is.
3. In your opinion, what’s the biggest opportunity (outside of student loans, of course!) for collaborative consumption right now and what legislation would need to be overturned to make it happen?
I think collaborative consumption is bigger in concept and ultimate applicability than what any of us truly understand at the moment, even among the most visionary among us. To think about what regulation needs to change to allow for collaborative consumption, across a number of different sectors, to reach its full potential is to have your brain explode.
In our industry—financial technology—I think the rules of the game could do well to allow for more free flow of capital between knowing and willing parties. The JOBS Act I think is a nice nod to that. Whether it’s the right first step is unclear, but it’s certainly the first of many necessary steps forward. No doubt it will take time, not least because regulation will have to keep up with reality.
4. We see that you’re a Trustee for the Bronx Charter School for the Art — what does it mean to be a trustee for a charter school, and how does that impact your work
Yes, I was a Trustee (i.e., Board Member) at the Bronx Charter School for the Arts here in New York. It was a wonderful experience, and came with immense responsibility – as a board member of a charter school, you are a strategic steward of an organization responsible for educating hundreds of kids every year – It’s a humbling and rewarding experience.
The impact that the Bronx Charter School for the Arts had on me can be seen, in part, in my company’s commitment to funding financial literacy programs in charter schools around the country. It was at Bronx Charter School for the Arts where I learned that a good school can make for a strong community.
5. You shared once that one of your greatest life lessons to date is: “You can de-risk your life by committing yourself to doing things that feel risky.” What’s the biggest risk you’ve taken recently? Business doesn’t count here!
Wow. You did your research. Yes, in that talk I shared a few core beliefs. One is that I believe it’s actually riskier to not take a risk than to take one. Especially for us millennials – we’d rather take a risk and fail than never take a risk and regret. That’s the case for me anyway.
I was in a sweet gig in corporate America with a nice trajectory. I could have kept on that path for the rest of my life and been “secure” and “comfortable” … but I also would have missed an opportunity to be me and to reach fuller potential.
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Featured in publications such as Inc Magazine, The Wall Street Journal, and The Economist, CommonBond is a venture- backed financial services company that has raised over $100M to lower the cost of student loans in the U.S. The company’s model connects student borrowers and alumni investors, allowing students to save on interest rates and investors to earn a financial return.
Prior to CommonBond, David worked in consumer finance at American Express, as Director of Strategic Planning and Business Development, where he led a $250M annual business. Prior to American Express, David worked at McKinsey & Company, where he advised clients in the financial services industry.
David graduated from Brandeis University with a BA in Politics, Economics, and International Business and is an alumnus of the Wharton School of Business at the University of Pennsylvania. David is also a former Board Member at the Bronx Charter School for the Arts in New York.
