A startup is aiming to change the way student loans are distributed by focusing on smaller private student loan options for shorter programs, as well as trying to quantify the value of the program for students so they get the best value for their dollar, according to The Economist.

Based in New York City, Climb Credit is a fintech startup that originates student loans at an average size of $10,000. Most of its customers are participating in programs that last less than a year - such as coding and web design.

The site also attempts to rank education providers based on the financial return students receive after completing the course or degree, minus the cost of student debt and the time it takes to complete the degree.

Climb tracks data on every loan it originates, including subject, teacher, institution, job offers, and starting salaries.

While Climb’s average interest rate of 9 percent is over double that of federally-funded loans, its default rates are in the low single digits. That could be the result of the site’s decision to not offer loans for certain fields, such as acting and modeling, because there is no evidence those courses offer a return.

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Another factor: Climb borrowers start making small payments towards their loans as soon as they take them out instead of waiting until after graduation. This way, students are not hit with accumulating interest while still in school.

While Climb’s results are still inconclusive—the only statistic the site has released so far is the number of loan applications it has processed—the startup intends to increase the number of institutions it covers. Right now, the company’s loans cover 70 schools and programs, while an additional 150 are being assessed. Eventually, over 3,000 programs may qualify.

Image Copyright Arn BO.