Edquity, an app that helps colleges deliver cash quickly and without bias to students experiencing financial emergencies, has experienced rapid growth in recent months as institutions work to help vulnerable students stay afloat.
The COVID-19 pandemic has exacerbated financial challenges for college students across the nation. Many students have lost jobs or income, and those from low-income backgrounds don’t have family safety nets to help fill the gap. A growing number of colleges and universities are trying to deliver emergency aid to these students in crisis—and some have tapped Edquity to help optimize the process.
CARES Act funding highlights implications of administrative hurdles
When Congress provided colleges and universities with $6.3 billion for emergency student aid via the Coronavirus Aid, Relief, and Economic Security (CARES) Act this past spring, it tested institutions’ processes for distributing funds to students in need. According to the Hope Center for College, Community, and Justice at Temple University, the CARES Act funds highlighted the delays that result from administrative red tape: delivering the CARES Act grants took institutions 44 percent longer than other, smaller emergency-aid programs.
Students had to wait an average of 13 days to receive help; best practice is 48 hours or less, especially for lower-income and first-generation students and those who are parents, according to Sara Goldrick-Rab, founding director of the Hope Center.
Edquity—where Goldrick-Rab serves as chief strategy officer—is designed to help institutions hit that two-day target. The app asks students in need to answer a few simple questions and informs them within a few hours whether they have been approved to receive a grant, usually of $500 or less. The platform delivers those funds via gift card or direct deposit within about 48 hours. Colleges, meanwhile, pay a licensing fee to use the app—costs that the institution recoups, in theory, by retaining at-risk students.
“If you can help somebody, with just a small amount of money, pay their rent, buy food for their family, and it keeps them enrolled for the rest of that semester so it helps them complete—that’s what this is about. It is absolutely a retention tool,” Pyeper Wilkins, vice chancellor of workforce and advancement at Dallas College, Edquity’s first college client, told EdSurge.
Edquity saw rapid growth across 2020, as college students and families experienced unprecedented financial strain and colleges stepped up to help. EdSurge reports that the company tripled its staff, brought on more than two dozen college clients, secured outside investment, and processed more than 30,000 applications between June and December, resulting in $7.5 million in aid distributed to students who needed help. About half of grant recipients are student-parents.
Writing in The Atlantic, Goldrick-Rab emphasizes the importance of emergency aid and calls on Congress to provide colleges and universities with the resources needed to get funds to students in an efficient manner.
“Many students, including some of my own, aren’t sure they can afford to return for another college semester,” she wrote. “They need financial support delivered flexibly, quickly, and respectfully. They should not have to demonstrate their poverty or rehash trauma to merit support.”