Press Release

Press Release — SoFi Leverages Alumni Communities to Transform Broken Student Loan Industry

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

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

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

— 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

— 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

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