Female Disruptors: How Charlie Javice of Frank, Is Shaking Up Access to Student Financial Aid
By: Jason Malki
Tags: Investors, Startup, Finance, Social Impact, College

Thank you so much for doing this with us Charlie! Can you tell us a story about what brought you to this specific career path?

My first start-up was on the road to creating an alternative credit score to FICO, one that was based on more current criteria and inherently fairer to students and low-income consumers. The company had come to a crossroads: to secure compliance approval in each state for our product, it would require much more than the $10 million in seed money I was seeking at the time.

My lead investor said to me, you have three choices: you can take three years to raise the money you’ll need to tackle state-by-state compliance, you can become an entrepreneur-in-residence for me, or you can come up with a brand new idea from scratch, as long as it has nothing to do with retail.

I went away for a week. I didn’t sleep. I didn’t see any people.

When I returned, I fired all my employees — it was the worst thing I’ve ever had to do. A lot of my employees were close friends, and still won’t talk with me to this day. They didn’t understand that it wasn’t a personal decision. I’m sure I could’ve done a better job communicating what was happening, but at the end of the day, no one would have liked the outcome.

Even though it didn’t make monetary sense to pursue a new credit score project, one thing became pretty obvious during the 18-months we worked on it: people were getting screwed by the cost of education. And that lenders had no right to decide whether a student was worthy or not based on the information they had.

The turning point for me was when somebody said: “If student loan data is so bad, how can you make it better?” We couldn’t challenge FICO directly, but there was another entry point to help students and it was right there on the front lines: the Free Application for Federal Student Aid form, also known as FAFSA®. The FAFSA® is the application students fill out to be eligible for any kind of financial aid for college.

The scenario surrounding financial aid was astonishing: only 61% of eligible students submitted the FAFSA® forms, leaving millions of dollars in unclaimed Federal financial aid on the table each year. The FAFSA® application has always been notoriously confusing, and many students don’t even know it exists because U.S. high school students lack access to guidance counselor and resources for college.

I thought, if we could close the financial aid gap, supplementing it with revenue services strictly for the genuine benefit of students (especially low-income ones), we would have a viable business and still be doing something to help students.

I told my investors, “This is what I’m going to do. I don’t expect you to invest today. But if I hit these types of milestones, would you consider re-investing?” They said, of course.

The first thing I did was hire an intern to help with marketing research, and spent time helping students in the Bronx fill out their FAFSA® applications. It was the first-hand experience I needed to understand what students had to go through just to get funding for their education.

I always like to say, there are many doors into a house. If you can’t get inside with one of them, keep trying others until you can get in.

What is it about the work you’re doing that’s disruptive?

“Accessibility” is at the heart of everything we believe at Frank. A college degree has never been more valuable than it is today, but it’s also never been more expensive. We believe that regardless of socioeconomic background, anyone who wishes to attend college and earn a degree should have the opportunity to do so.

The national narrative surrounding college right now revolves around two things: the skyrocketing costs of attending college, and the $1.5 trillion student loan debt crisis. We want to put the focus back in the classroom. Figuring out how you’re going to pay for college shouldn’t be more complicated than your college curriculum.

We started by simplifying the FAFSA® form. The main issues with the form being that, while the overall program was created with the student in mind, the FAFSA® was created with government and school officials in mind. It’s an unnecessarily complicated and rigid application that serves as a roadblock for many students.

I worked with about 1,000 Bronx high school students over five months, then built out software with smart logic to literally replicate my guidance in filling out the forms. We took the 108 FAFSA® questions and transformed them into a shorter, student-friendly workflow that reduced errors and sped up completion. While the FAFSA® can take hours to complete, our application reduced the average time to just over four minutes! Just by making it easier to understand and complete, we started to see some of the barriers that prevent students from getting aid tumble down.

We all need a little help along the journey — who have been some of your mentors? Can you share how they made an impact?

Bobby Turner of Turner Impact Capital set a brilliant blueprint.

He told me a company’s success is often defined by how much change they earn or how much change they affect. It takes a truly special company to achieve both results.

How can you make money by fixing a financially broken education system? There’s an altruistic side to this project that wants to get money to students because the students need it to continue their education and ideally secure jobs in growing industries. But diverting money to other people and groups isn’t a sustainable business model.

It all seemed impossible, not just in the education space, but the entire social impact space. Until you hear Bobby Turner talking about it, and then you realize it can be done.

Can you share 3 of the best words of advice you’ve gotten along your journey?

I’m a mid-20’s female CEO in the tech industry, so I’ve heard the same sentiment expressed in a variety of different ways: “You’re too young. Go work for somebody else. Who’s the grey hair in the room?”

Those comments alone are enough motivation to keep pushing forward, but they also come back to the same piece of advice: “Don’t be patient.”

From a young age, I’ve known what I wanted to do and where I wanted to go. I graduated from the University of Pennsylvania in three years, all while balancing the demands of my own non-profit. How long would I have waited for this opportunity if I pursued a more traditional career path? Some people wait for the perfect moment, but the perfect moment never comes.

I’ve been fortunate to have incredible mentors who have shown faith me in from the beginning. Armed with that support system, staying patient was never an option for me.

Another valuable piece of advice was, “When you hire, look for empathy.” You may never understand what low- and middle-income students go through, but you have to have empathy for their situation to do this job. I apply that to my entire recruiting process. I ask every candidate about an experience they’ve had where they couldn’t relate to the problem being presented, and how they responded to that experience.

It’s a mantra that even helped us raise money. We were lucky when we discovered one of our investors, Dan Senor, remembered filling out his FAFSA® forms for business school and what a nightmare it was. I told him, “That’s what I’m going to fix.” And he said, “Where do I write the check?”

How are you going to shake things up next?

We are about to chip away at an even bigger higher education problem called “undermatching.” Undermatching is when low-income students don’t apply to colleges they are academically qualified to get into because they don’t have the resources to know those options are available to them. Instead, they apply to only one or two colleges that are not particularly challenging. With so many high school students lacking resources like guidance counselors, many students stick with what they know, which limits their opportunities.

To combat undermatching, we recently launched our College Match program based on data we’ve collected through our FAFSA® application. The data showed that a lower household income directly correlated to the number of colleges a student applied to. So, for example, an annual household income of less than $50k means a student will often apply to only one or two colleges.

This phenomenon seriously impacts the students’ odds of receiving competitive financial aid offers, causing a chain of events that set students back financially before they even graduate and for years to come.

With the new College Match program, students who opt to send the FAFSA® forms to only one or two schools will be alerted to the advantages of applying to more schools, and how it will help improve their financial aid prospects. Then the students will get recommended additional colleges to apply to, based on the student’s location, field of study, and school value as defined by two industry benchmarks: graduation rate and cohort (loan) default rate.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

My generation has grown cynical about the American Dream, that it’s no longer attainable for the majority of Americans.

It’s funny, on the face of it, the American Dream is about engendering hope across the entire nation, and hope itself can be just as dangerous as it is inspiring. Hope can be fulfilling, which leads to complacency.

The key to the American Dream is using that hope to fuel action. I want to ensure that everyone has access to the tools they need to act on the hope of the American Dream.

Can you please give us your favorite “Life Lesson Quote”? Can you share how that was relevant to you in your life?

Emile Zola said, “I’d rather die of passion than of boredom.”

I’m someone who’s always needed to work towards something that improves the lives of many. In college, I had my non-profit, PoverUp, which helped students gain experience in the world of microfinance. Now, I have Frank, which aims to open the doors to education for students who have been told that a college education is not a realistic goal for them.

I’d never be satisfied working a nine-to-five, rushing to the gym, and whiling away my evening drinking wine and binge-watching The Gilmour Girls. There’s too much I want to accomplish.