Edquity Raises $2.4M to Help Schools Deliver Emergency Funds to Students...


Edquity Raises $2.4M to Help Schools Deliver Emergency Funds to Students in Need

By Tony Wan     Jan 7, 2020

Edquity Raises $2.4M to Help Schools Deliver Emergency Funds to Students in Need

Some of the biggest barriers to academic success have nothing to do with academics. Rather, they usually entail basic human needs. After all, it’s hard to do well in school when you’re hungry, or unable to get rest or go to class.

As it turns out, higher-ed institutions have emergency funds to offer temporary relief for students struggling with food, housing, transportation and other needs. But few know about this safety net and, if they do, applying for and receiving the money can be a tedious and lengthy process.

That’s what spurred David Helene to start Edquity in 2016, and its mission to make emergency fund disbursements more efficient has attracted some funding of its own. The Brooklyn, N.Y.-based startup has raised $2.4 million in a seed round led by ECMC Foundation. Other investors include the Omidyar Network, Spring Point Partners, the American Family Insurance Institute for Corporate and Social Impact, Michelson 20MM Foundation and WGU Labs, a research and investment incubator affiliated with Western Governors University.

To date, Edquity has raised about $4 million in investment capital, according to Helene, the company’s CEO.

The company’s flagship offering is an app that lets students apply for the emergency aid from their institution, which entails answering about a dozen questions about their situations. The app also offers what he describes as a “Yelp for emergency resources” that shows a map and reviews of local relief programs near campus.

Helene says the goal is to create a “digital one-stop shop where students can get streamlined access to emergency support. We do not intend to replace resources. We want to increase access to those resources.”

What the app does replace, though, is human judgment when it comes to awarding aid. On Edquity, students can apply for aid in as little as two minutes and hear back within 24 hours about whether or not they have been approved, says Helene. If so, funding can be disbursed to the student within 48 hours. Awards on average total $500.

Emergency aid application questions on Edquity app
Screenshots of questions on Edquity’s emergency aid application app. (Image credit: Edquity)

That’s a faster turnaround than existing processes at some schools, which can take as long as two weeks before making a decision, according to Sara Goldrick-Rab, a professor of higher education and sociology at Temple University who works part-time as Edquity’s chief strategy officer.

And while Goldrick-Rab says she views many for-profit education technology efforts with critical skepticism, in this instance, she believes Edquity’s “evidence-based algorithms” offer a quicker and more equitable way to deliver financial aid by “putting technology in places where humans don’t belong.”

In some schools, emergency aid applications require an interview where students undergo what amounts to a “performance of poverty,” in her words. “Students are put in a position where they have to demonstrate to someone else that they deserve money because they are poor. That can involve begging or crying. Others put on their best outfit and try to give the best impression, as if they were going in for a job interview.”

This opens the door to subjectivity and biases, Goldrick-Rab adds: “It’s highly racialized. It’s gendered.” She’s heard of instances where officials have commented on students’ cell phones, nail polish or purses as they decide whether or not to award financial aid.

Helene says that the Edquity’s tools are partly informed by the work and research of BridgeEDU, a company it acquired last June focused on helping underserved and low-income students overcome financial obstacles.

About half of U.S. colleges and universities currently have emergency funds to support students with basic needs, Helene adds, and he’s been encouraged by the recent passage of state-level bills, such as those in California and Washington state, that will earmark additional funding.

Edquity’s emergency aid technology is currently used in a handful of institutions, which pay the company an annual licensing fee based on the number of students enrolled. Helene declined to share specific pricing details.

The company’s largest client is Dallas County Community College District, a network of seven community colleges where it coincidentally launched a few days before a series of tornadoes hit the region last October. Within the first hour, it received 100 applications from students requesting aid, says Helene. Since then, students have received nearly $100,000 in emergency aid via the app.

The Little Big Things

Helene credits much of Edquity’s approach to the research conducted by Goldrick-Rab, who is considered a leading authority on college affordability and has authored a book on the issue. She’s also launched her own effort to provide professors with funds that they can award to students in need.

Conversations and concerns over the rising cost of higher education tend to focus on ballooning tuition. But it’s the small, unexpected and often overlooked factors that can derail a student’s plans to complete their studies. And just as a missed utility bill, a car repair and doctor visit can quickly add up, a small check can make a big difference in helping them stay on their feet.

Research led by Goldrick-Rab has revealed startling results about how many students struggle with basic needs. In a 2016 survey of over 33,000 community college students across 24 states, two-thirds reported being food insecure, and half lacked reliable housing. A 2018 survey of nearly 86,000 students at two- and four-year institutions found that about half were either food or housing insecure.

Housing, transportation and food rank respectively as the biggest challenges facing students who have used Edquity’s app. Eighty-four percent of them are dealing with more than one issue at once, Helene adds.

With the new funding, Helene aims to reach more institutions and build out a network of local community business partners that can help students in need. He offers, as an example, a hotel that provides temporary accommodations for students who need housing. Supporting these efforts could boost the company’s headcount of 10 employees by a couple additional staff.

As part of the investment, Edquity will also be part of a study led by Western Governors University that will examine how the tool impacts student retention and other success metrics.

When it comes to expanding Edquity’s footprint, “the number one obstacle is that schools want to see evidence before signing up with us,” says Goldrick-Rab. “But I’m not worried. I’m a researcher, and I’m excited that they’re willing to wait for evidence. They should.”

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