When David Helene built an app to deliver cash to college students in crisis, the emergencies he had in mind were personal, like needing money to buy groceries for the week or pay bus fare to get to class.
But as the platform, Edquity, was about to go live with its first partner, Dallas College, in October 2019, severe tornadoes hit northeast Texas. Buildings were wrecked, and tens of thousands of people lost electricity.
Suddenly, Edquity was facing down a natural disaster.
“You never want to roll out technology in an environment like that,” Helene says.
Yet Edquity and Dallas College didn’t shy away from the increased need for help. During the platform’s first 24 hours in action, it received 250 student applications for aid. The tech held up. Money reached students. And Helene realized that Edquity had the potential to assist communities in crisis.
“It is the right system for disaster relief and or true emergencies,” he says.
Little did the Edquity team know how soon that belief would be put to the test. What felt in fall 2019 like a climax was only a prelude.
“Nothing has been normal since that launch,” says Pyeper Wilkins, vice chancellor of workforce and advancement at Dallas College. “Who could imagine that the year could be what it was. The Dallas College journey with emergency aid has been crazy.”
A few months after the tornadoes struck Dallas, COVID-19 swept across the U.S. College campuses closed. Students lost jobs, child care and access to dorms, dining halls and food pantries.
Congress put emergency aid for students in the spotlight by giving colleges billions to spend on direct cash grants. Hundreds of colleges sought help from Edquity. The company’s staff tripled, its portfolio of colleges served grew to more than two dozen, and in November, it raised $2.77 million from investors.
Edquity aimed to grow slowly and steadily this year. 2020 had other plans.
As Helene puts it: “The pandemic changed everything.”
Social-Service Mission, For-Profit Model
For low-income students, small sums of money can mean the difference between skipping and attending class, or focusing on schoolwork instead of a grumbling stomach.
Some colleges have started paying closer attention to this reality. At Dallas College, many students don’t have reliable access to housing they can afford, Wilkins says. At Compton College, a community college in California that now uses Edquity’s services, a 2019 survey found that more than half of students experienced food insecurity, 63 percent experienced housing insecurity and 23 percent experienced homeless within the year.
To address these problems, some colleges set aside funds or solicit donations to give modest grants to students who apply for help. But from Edquity’s perspective, “these institutions are not set up to get this cash out in a way that is quick, flexible and effective,” Helene says.
Leaders at Dallas College knew there was a lot of need among its more than 100,000 students, but devising a system to serve so many people with emergency aid was daunting.
“How can we do it fairly? Without bias? We would have to hire about 30 people to do something like that,” Wilkins says. “We began to look for an alternative.”
Edquity’s application takes students just a few minutes to fill out, and the platform informs students within a few hours whether their requests will be granted. Then, within about 48 hours, the system provides students with money—usually up to $500, depending on college policy— either through direct deposit or through pre-paid gift cards.
That student-friendly design—built based on research from The Hope Center for College, Community, and Justice, whose founding director is also the company’s chief strategy officer— made the platform appealing to Dallas College, which signed up to be Edquity’s test partner.
The system also attracted investment capital. By January 2020, Edquity raised about $4 million, including $2.4 million in a seed round from ECMC Foundation, Omidyar Network, Spring Point Partners, the American Family Insurance Institute for Corporate and Social Impact, Michelson 20MM Foundation and WGU Labs.
Investors told EdSurge they appreciate Edquity’s mission and methods.
“They are trying to tackle one of the most inefficient pieces of the social safety network that we patch together in this country and make it function for the most vulnerable people,” says Margot Kane, chief investment officer at Spring Point Partners. “It’s a lightyear’s jump in terms of efficacy and meeting real need.”
The company uses a licensing model to charge its college clients based on the size of their student bodies. In addition to helping students, it aims to help institutions, too, by improving their student retention rates. That’s of special concern now—because enrollment is down at colleges across the country.
“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,” Wilkins says.
Helene and his backers think that this potential return on investment makes Edquity’s model for emergency aid more realistic than relying on philanthropy alone.
“Edquity continues to prove us right that you can build a sustainable, scalable, for-profit company that is also tied to transforming and disrupting inequity,” says Shayna Hetzel, social impact investment director for equity in education for the American Family Insurance Institute for Corporate and Social Impact.
Powering Pandemic Relief
A company’s growth statistics usually feel celebratory. But Edquity’s 2020 figures hint at how difficult the year has been for students and colleges.
Since June, the company has processed more than 30,000 applications and helped institutions distribute $7.5 million in aid. Beneficiaries range in age from 18 to mid-70s, with a median age of 31. More than half of recipients say they’re responsible for dependents.
“Forty-four percent of applicants have children,” says Wilkins of students who have applied from Dallas College. “It tells you that we are helping families.”
By the end of the spring semester, business was picking up for Edquity. The company fielded more than 100 inquiries from colleges looking for better ways to support their students during the pandemic. To support its work, it received more than $1 million from the Bill & Melinda Gates Foundation. And it rolled out its platform with three new partners: Compton College, Western Governors University and United Way of King County.
“It was a little scary. The technology hadn’t quite been built for scale yet. We looked at case studies across the country, and systems were crashing because they were getting so many applications,” Helene says. “We were very happy to see the technology performed exactly as it should. At our apex, we processed 8,000 applications in a single day.”
Leaders at Compton had been interested in the idea of providing emergency aid to students before the pandemic, but the crisis nudged them into action—and into a deal with Edquity.
“It was perfect timing for us,” says Keith Curry, president of Compton College. “I think they’re a great resource. They’ve been very helpful to us as we move forward.”
Meanwhile, having survived tornadoes together, Edquity and Dallas College took their relationship to the next level. The company helped the college process the pandemic-relief dollars it received through the CARES Act. Because those funds could only go to students who met certain criteria—including U.S. citizenship—the partners developed a process for screening student applicants for eligibility. Dallas students who could receive CARES money did, and those who couldn’t received privately raised money instead.
Getting students to apply for pandemic aid in the first place has been its own challenge, Wilkins says. Dallas is using social media, texts and emails to target students at times they seem most likely to fill out Edquity applications: between 6 p.m. and 6 a.m. on the weekends.
In this way, Dallas has processed about 9,000 student aid applications since April and awarded more than $5 million in CARES funds. Without Edquity, Wilkins says, “I don’t know how we would have done that, especially in a pandemic when everybody is remote.”
It seems as though Edquity will have plenty of work for its new employees and funding in the new year. The company has new projects, like Compton College’s plans to use the platform to expand its support to high school dual-enrollment students. And it may find increased demand if the federal government moves ahead with the additional pandemic relief it was considering sending to colleges as of late December.
“We would anticipate moving very fast to support institutions with this next wave of funding,” Helene says. “Unlike in May, we feel ready to scale quickly.”
Beyond its short-term effects on Edquity’s growth, the pandemic also may have shifted some attitudes in higher education about the company’s underlying philosophy—that it’s important to help people quickly and simply.
“Direct relief and aid has become more accepted as a best practice,” Helene says.