Earnest has refinanced more than $400 in student loans; its CEO did not specify the portion of refinancing for MBAs, but said they area really big segment of our clients.” Common Bond expects to hit $1 billion in refinancing and MBA-program loans this year.

U.S. student debt, the vast majority of it in federal loans, hit an estimated $1.3 trillion in 2015.

PILLAGING THE STUDENT LOAN MARKET. SoFi, Earnest, and CommonBond have literally pillaged the student loan market, exploiting intense customer dissatisfaction with the higher interest rates and poor service of the federal government and traditional banks.

While the government issues student loans to anyone going to college or graduate school, the refinanciers can pluck the cherries and reap a bountiful harvest of some of the worldsmost sought-after debtors borrowers with lots of debt but virtually no risk of default.

It’s just not the same loan as potentially the loan they took 10 years ago,” says Beryl, a 2012 Harvard Business School MBA.The person who made the loan 10 years ago was assuming a different level of risk, when that was still going to school and wasn’t yet employed. The large incumbent players, whether it’s the federal government or the large private student loan lenders they weren’t really taking account of the dramatically decreased risk of someone after they’ve graduated from school.”

Earnest has never had a student loan refinancing default, Beryl says, and neither has CommonBond, according to CEO David Klein.

The average Earnest student loan refinancing client is 30, carries $70,000 in student loan debt, and saves an average of $18,000, Beryl says.