SoFi Blog

Many Business School Graduates Can Save Thousands By Refinancing Existing Student Loans With SoFi ReFi

The more you learn about the student loan market, the more you realize how broken the system really is. There are horror stories about companies suing parents whose children have died before repaying their student loans. Others tell tales of loan companies being totally inflexible and demanding full payment even when a borrower has hit a temporary rough patch.

[Update (as of 9/27): Removed outdated savings calculation information.]

SoFi Can Save Student Borrowers Thousands of Dollars Without Sacrificing Benefits

San Francisco – May 3, 2012 – Social Finance, LLC (SoFi) announced today that the company’s Community Loan Program for students and recent graduates will match the benefits of the government’s Direct Loan Program, offering borrowers income-based repayment options, loan cancellation in the case of death, relief for economic hardship and other advantages. With today’s announcement, borrowers from participating colleges and universities will receive a range of benefits comparable to those offered by the government’s loan program at fixed interest rates more favorable than the government’s current unsubsidized Direct and PLUS loans and much more favorable than virtually all fixed-rate private offerings.

SoFi will provide all benefits on terms comparable to those currently offered by the government, with the exception of the loan forgiveness program. Unlike the government’s loan forgiveness program, which is open only to those in teaching or public service after many years of loan repayment, SoFi’s participating alumni investors may choose to reduce or cancel the debt of any borrower, including for work in teaching, public service or even entrepreneurial efforts.

“We wanted to create the best student loan we could,” said SoFi’s CEO Mike Cagney. “By matching the government’s current benefits, we’re making our fixed-interest rate student loans even better, and we hope that every lender – whether government or private – will rise to the challenge and offer students a fairer deal. If students are going to have to take out loans to pay for school, everyone should be working hard to reduce their debt burden.”

SoFi was founded at Stanford University’s Graduate School of Business in 2011 to bring the power of social networks to finance. SoFi’s community-based lending programs connect students and alumni through dedicated lending pools that provide students with lower-cost student loans, alumni with a new investment opportunity, and both groups with a way to engage each other through new online social networks.

“The whole idea behind SoFi is to use new technology and social media to get back to an old-fashioned model of finance where members of a community invest in the success of other members of the community,” said SoFi’s Cagney. “We believe the benefits offered by the government’s program are consistent with how a community should treat its members, and so we decided to match them.”

The SoFi Community Loan Program is expanding to business school, graduate and undergraduate students at 40 public and private universities across the country, as well as to recent graduates seeking to refinance or consolidate their existing loans. The company will offer up to $150 million in new loan offerings for the upcoming school year.

Key features of SoFi’s Community Loan Program include:

— 6.24% (6.32% APRi) fixed-rate loan for enrolled students that drops to 5.99% (6.13% APRi) in repayment with auto payments.

— 5.99% (5.99% APRi) fixed-rate refinance loan for recent graduates with no origination fee and required auto payments. 5, 10 or 15 year repayment terms available.

— $5,000 loan minimum, $200,000 maximum (or up to cost of attendance, whichever is less), with no need for a co-signer.

— Deferrals for continuing education; a grace period on graduation; non-standard repayment options such as income-based and extended repayment; deferment and forbearance for economic hardship and other defined circumstances; cancellation upon death or disability; and possible forgiveness for teaching, public interest work, entrepreneurial efforts or other reasons.

— Access to the SoFi online community, where SoFi facilitates online and offline interaction between students and alumni in areas ranging from career advice to loan assistance.

— Qualified alumni can invest in a certificate backed by student loans from their alma mater (IRA eligible). Within the SoFi community, alumni investors connect with loan recipients in a meaningful way, providing career guidance and learning from a new generation of future leaders. (ii)

Enrollment in SoFi’s Spring 2012 Community Refinance Loan Program will be open until June 30 or until funds are fully allocated. SoFi’s Fall 2012 Loan Program for enrolled borrowers will open in July 2012. Loan dollars will be distributed to eligible students on a first-come, first-served basis. (iii)

About SoFi

Founded in 2011, San Francisco-based Social Finance, LLC “SoFi” offers a community-based lending and refinancing program open to Graduate and Undergraduate students at US universities. Interested students, alumni and investors are encouraged to visit www.SoFi.com for more information.

i. Terms and Conditions Apply. Call 866-357-6342 to receive a fax or hard copy of all applicable disclaimers, assumptions and up-to-date information.

SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. CHECK SOFI.COM FOR THE MOST UP TO DATE PRODUCT INFORMATION.

ii. Certificates offered by SoFi Securities, LLC. Call 866-357-6342 to receive a fax or hard copy of all applicable disclaimers, assumptions and up-to-date information.

iii. All loans made under Social Finance, LLC (dba SoFi) or SoFi Lending Corp (dba SoFi). Social Finance, LLC is a licensed California Finance Lender. License Number: #6054513.

Successful $2 Million Stanford Pilot Paves the Way to 40 More Schools, $150 Million
in New Student Loans at Market-Leading Rates

San Francisco – April 2, 2012 – SoFi is launching a nationwide rollout of its innovative Community
Loan Program for students and recent graduates. SoFi brings a new party to the broken $1 Trillion
student loan industry – alumni. Through dedicated school-specific lending funds, SoFi empowers
alumni to provide funding for students through their IRAs, creating meaningful long–term
communities.

Alumni do well and do good, meaning they earn an attractive financial return from an investment
they feel is making a positive difference to their community. Most students receive a lower
fixed loan rate than their private or Federal options. Both alumni and students benefit from the
connections formed. In addition, schools access a new, stable, and low cost way to address their
student-funding gap while enhancing accountability to students and alumni.

“The current student loan market is unsustainable,” said Mike Cagney, SoFi CEO. “Between the
government – which accounts for 93% of student lending, students and schools, no single party is
particularly vested in the others’ long–term success. What is missing is a community solution where
the interests of all members are aligned. Alumni provide the missing ingredient as they care deeply
about both the students and the reputation of their alma mater. Through the SoFi Community Loan
Program, alumni have a financial incentive for the students to succeed above the existing natural
affinity that already exists. High default rates directly affect alumni, meaning they are incented to
keep the school accountable to its product – the education the students receive – helping to ensure
the students’ debt at graduation is commensurate with the value of their degree in the job market.
And the community persists beyond any particular loan – this is a long-term engagement.”

SoFi started at Stanford University’s Graduate School of Business in the Fall of 2011, raising and
lending out roughly $2 million. The pilot community had 40 alumni and nearly 100 students. Ben
Kessler, an MBA student and a SoFi loan borrower, said a combination of SoFi’s affordable rate and
unique form of access to the school’s alumni set the program apart. “The SoFi application process
was easy and its loans are among the best on the market,” he said. “In addition, I have received
some great practical advice from alumni investors who have a direct economic interest in my
success.”

On the back of the success and enthusiasm at Stanford University, SoFi is expanding its program to
40 schools and $150 million in loans in 2012. Key features of this year’s Community Loan Program
include:

— 6.24% (6.39% APR*) fixed rate loan for new students that drops to 5.99% (6.14% APR*) in
repayment with auto payments.

— 5.99% (5.99% APR*) consolidation loan for recent graduates.

— $5,000 loan minimum, $200,000 maximum (or up to need, whichever is less), with no need for a
co-signer.

— Deferrals for continuing education, a grace period on graduation and community-based loan
support options.

— Access to the SoFi online community, where SoFi facilitates online and offline interaction
between students and alumni in areas ranging from career advice to loan assistance.

Alumni investors earn nominal returns of 5% to 8%, pending on the level of risk they take in their
investment. Alumni can invest directly or through their IRA, meaning investing does not impact
alumni donations to the school. Within the SoFi community, alumni have the opportunity to identify
and connect with students with common interests and backgrounds, thus directly influencing their
own economic return via participation.

While launched in 2011, the seeds for SoFi were planted during the financial crisis of 2008. “I began
to look at lots of new business ideas in finance – but I didn’t find anything I felt had defensibility to
the big banks,” Mike Cagney said. That changed in 2010 when Cagney entered Stanford University’s
Graduate School of Business as part of a Sloan Fellowship and met several of his co-founders. “I was
fortunate to find a team that understood social. Social unlocked our model. It allowed us to take
the old community banking model – something that worked for hundreds of years before being
supplanted by the mega-banks – and reintroduce it. Only rather than community being defined by
geography, we defined it through social. While we’re rolling out to 40 schools this year, we want to
take SoFi to every school as fast as we can.”

SoFi is funded by a group of leading individual and institutional investors, including board
members Joe Chen, founder and CEO of RenRen (China’s equivalent to Facebook), and Steve
Anderson, Twitter seed investor and founder of Baseline. Mr. Anderson said, “This has the potential
to be a much bigger idea in the way student loans are financed going forward, and I believe that this
model will be successfully used to fund the educations of students everywhere.” SoFi’s model has
been shaped with the help of investors and advisors deeply rooted in education, including trustees
at schools such as MIT, Williams and the University of California system.

*APR calculations are based on a first-year MBA student who takes all funds in one disbursement, is in deferment
for 21 months and defers all payments while in school. It assumes the student enters into a 6-month grace period
and, upon starting repayment, makes all payments on-time thereafter. APRs may increase or decrease based an
applicant’s situation. SoFi will provide applicants with a specific APR estimate during the application process.

**Social Finance, Inc is a licensed California finance lender and its loans are made under license number
6054513.