- CommonBond's refinancing business took a massive hit amid the pandemic's interest and payment pause.
- It effectively exited the business in June and pivoted to loans for residential solar panels.
- The company's CEO David Klein announced the decision in a LinkedIn post.
Student loan lending company CommonBond quietly announced it will be "winding down" its operations after its core businesses saw a hit during the pandemic.
CommonBond cofounder and CEO David Klein said in a LinkedIn post that despite shifting to focus on residential solar panel loans, the impact of the student loan payment pause made it hard to continue the business.
"The story of what has led us to this point starts with Covid," Klein said. "When the pandemic hit, our Student business took a hit. Half of the Refinance market went away as the government paused interest and payments for all federal student holders. More than two years later, that policy is still in place."
CommonBond launched in 2012 to help originate student loans at lower rates and offered refinancing services.
But during the pandemic, the US government paused federal student loan repayments, a move that was extended until President Joe Biden approved a plan to cancel up to $ 20,000 in student loans in early September.
In June this year, CommonBond officially announced it would formally expand into lending for people who want to buy and install solar panels on their homes. It began offering loans for solar panels in the third quarter of 2021 and, by 2022, was on pace to lend $ 1 billion to customers. At the time, the company said it was a logical step for them as many of its student loan customers buy a house within a few years of refinancing with CommonBond, and there is strong interest in helping curb climate change.
Klein said in his LinkedIn post the solar lending business "is where we were growing quickly," but ultimately, CommonBond's solar financing model was still scaling up and needed to access new capital.
"Unfortunately, we couldn't pivot the entirety of the business fast enough," he said.
CommonBond did not respond to a request for comment.
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