Speaker 1 00:00:04 You're listening to the College Is Worth It Podcast, learn from leaders who are transforming higher education to ensure that a college degree will pay off for this generation and the next by exploring innovations in education with us in each episode. And now your host Vi Nguyen.
Speaker 2 00:00:20 Everyone. This is Vi and you're listening to the College Is Worth It Podcast. I'm really excited to be speaking with Peter Samuelson today, who is a CEO and founder of our sponsor, Ardeo Education Solutions. It is with extreme pleasure that I introduce Peter Samuelson. Hi, Peter, how are you doing today?
Speaker 3 00:00:38 Hi, there Vi doing well. Thanks for having me on.
Speaker 2 00:00:41 Yeah, of course. It's my pleasure. I'm really excited to speak with you and about how you're able to find a successful startup, which is of course Ardeo Education Solutions a company that partners with higher education institutions to give out LRAPs. But before we get into Ardeo specifically, um, where does the story start for you more specifically your higher education story?
Speaker 3 00:01:05 So it goes back to college. As I was a high school, senior looking at colleges, I really wanted to go to Wheaton college up in Chicago, and I'm just a classic story of, I couldn't afford it. So my mom taught at a small college in Kansas, and I got free tuition at Greenville college in Illinois. And so Wheaton college offered very little financial aid and it was really hard to decide to borrow a lot of money when I could go for just the cost of room and board to Greenville. So, you know, a very traditional story. You hear this a lot talking to families about where their, uh, sons or daughters going to college, or where did they go to college and you hear so often the, I can't afford it store. So I went somewhere else, right. Had a great time at Greenville, but wasn't my first choice.
Speaker 3 00:01:43 Wasn't the preferred college. And, uh, that just happens a lot. So that's where it starts in just my own personal experience. And at that point, there was no idea for L a for the loan repayment assistance programs. There was no idea to help students in that situation, but I lived through that frustration of not being able to go to my preferred school. When I got done with Greenville in my senior year, I was looking at law schools and really chose law schools out of a process of elimination. I didn't wanna go to med school. I don't like blood, uh, thought about doing a PhD, but couldn't, uh, figure out a topic or a field. I wanted to study that much. And everyone said law schools kept options open. So I was looking law schools and, uh, ultimately the choice came down between Chicago and Yale.
Speaker 3 00:02:28 Uh, Yale was the best law school in the country, according to most of the rankings and kind of just the conventional wisdom. Chicago was close by in the Midwest and they offered me a lot more money, 20,000 more than Yale. And so I thought I was gonna go to, uh, Chicago. And then I discovered Yale at a loan repayment assistance program. And this is where the idea for our Dale really comes from is Yale had just launched their L R and the promise was awesome. Come here. And if you, uh, earn not much money when you graduate, we'll make your loan payments and the idea coming from Yale, they weren't afraid of students not getting a good job. They really wanted to empower students to go choose, uh, nonprofit work, right, go work for the government, work for a nonprofit, be altruistic, change the world. You can't do that with a hundred thousand dollars of debt. So we're gonna make it possible for you to go do something else. And Chicago wasn't doing that. So I looked at Chicago and I said, I would get a great education in Chicago, but it's not my first choice. And now I'll go take more debt at Gale, but I'll have the chance to go do anything I want after graduation. And that's really where the idea for our gal comes from is let's take these L wraps that Gale provided and make them available to students.
Speaker 2 00:03:38 Thank you so much for that's super interesting. And so the first question that comes up into my head is I think of LRAP as sort of an enrollment tool, but of course, Yale is I think the number one, number two law school in the world. So how does, how did Yale use this tool of an LRAP besides enrollment, cuz I'm sure they don't have problems recruiting students to come.
Speaker 3 00:04:03 Absolutely. Right. Yale has more students than they need. Right. They get a huge number of applications and admit a lot of student, well, they get a huge number of applications. They only admit a few every year and they're really in competition with Chicago with, uh, I'm sorry, Stanford law school. They're really in competition with Stanford law school and Harvard law school. And so for Yale, it's really a question about how do they compete more effectively? And at the time they came up with LRA, Steve Vandel was the associate Dean who put it together and he was struggling to make sure that they would win those heads up battles. When a student was admitted to both Harvard and Yale or admitted to both Stanford and Yale, and once he rolled out the LRA, they won those heads up battles handling, whereas before they had struggled sometimes to win those.
Speaker 3 00:04:47 So even though they have plenty of students, every school always wants more better students and every school wants to get those same students for less money. So Steve handle with the LRAP was able to package people like me for 20,000 less financial aid and still encouraged me to come to school. Right? So the school saved, uh, if you take that times 200 students, the school saved a huge amount of money compared to peers every year and they could put those resources into other programs. So even the best schools have a real reason to see if they can't bring in students for a little bit less money, or if they can't win some of the more higher caliber students in their head to head competition with their, uh, competing colleges and universities.
Speaker 2 00:05:26 I see. Thank you so much. That makes a lot of sense. And so moving a little bit back to your story with an LRAP, I know that gives you a bit more job flexibility. You mentioned that Yale wanted a lot more people to take up nonprofit jobs and such. So I'm wondering what you did with this flexibility more basically. What did you do after going to law school?
Speaker 3 00:05:47 I had a great time. I went to China and I went to Sudan first to Sudan and then to China to do human rights work, uh, spent almost a year and a half, well almost two years, uh, really traveling around the globe and doing human rights work, work in several different places. Uh, got an article published at the, uh, Harvard international journal of, or Harvard journal of international law. Um, so I had a great time and that's exactly what ya wanted students to do when they came out of law school. And then I went to wall street and got a good job and paid off my loans myself, which was also the other P of the reality, right? Yale couldn't afford to give a full ride to every student who said, I wanna come to law school and then go do human rights work or, or nonprofit work because a huge number of incoming students want to do that or say they want to do it.
Speaker 3 00:06:30 And a lot of graduates do it for a year. Like I did very few do it for more than three or four years. And the real cleverness here of the LRAP is gamble. Promise students. If you spend your entire career in public interest, then after the fact you've got a free ride to Yale law school, if you don't, if you go right to making money, you pay off your own loans. That's fine. If you spend a year or two doing human rights work or nonprofit work, government work, and then pay off your loans in a full paying job, that's fine. Right? So it's really an effective way to give people freedom to pursue what they want to pursue their passions after graduation and only spend the money on those graduates who most need it. Instead of giving it to people up front to, uh, say they might go do nonprofit work and then end up going to wall street and making more money themselves.
Speaker 2 00:07:14 Yeah. Interesting. Wow. Sounds like you probably have a lot, lot of adventures due to your experiences with L rap and Yale law school. Then that sounds really interesting and exciting. So jumping ahead of your personal story, when did you decide to start Ardeo? Was there a specific event that triggered this company idea? So
Speaker 3 00:07:33 Really two events triggered it. I joined the board of a small college where my mom taught central Christian college, in McPherson, Kansas, just a few hundred students. And I was flying out to a board meeting and I thought we do a huge amount of work or the college does to get students interested in coming to apply. And then once they apply, we admit almost all of them and only about 25% show up. And that number's probably less today, right? So I thought all that huge marketing effort to bring these students in the door. And then after they get admitted, most of them feel like they can't afford central. And so they go to the local community college. And as I was thinking about that, I thought that's exactly the same situation. Yale was in totally different student body. They're headed to different careers at a very different point in life, but they got interested in the school for whatever reason.
Speaker 3 00:08:23 And then when given the choice to attend, they said, no, I'm gonna choose the cheaper option, right. Because I just can't afford it. And that really, uh, uh, you know, went back to my experience at Wheaton and, uh, Greenville not going to where I wanted to go. And then back to my experience at Yale and Chicago, getting to go that time to where I wanted to go. And I thought we at central should offer the same promise the Yale is offered, but of course a small little college has trouble doing it on their own. Yale has a big endowment. They've got a lot of people there. They've got access to real resources and expertise. They can hire actuaries, they can hire other people. They need to design the program and a small college like central just can't do that. So that's where the idea came to me that I should set up an association where we could provide this program as a turnkey for colleges. And that that's really where the idea came from of let's take this, commercialize it and make it available to every college across the us. So all of their students do benefit from it.
Speaker 2 00:09:16 I love that. I love this full circle moment with your life, how you took this real life experience and sparked this idea of our day education solutions to give out or work with client institutions to provide LRA. So could you explain a little bit more about what is an LRAP? I know people might be wondering how is this stiffer from IBS or other types of loans?
Speaker 3 00:09:40 Sure. So, uh, great question. So an LRAP is a loan repayment assistance program. And the promise to the students is very simple. Come here to this college. Who's giving it to you when you graduate. If your income is below some number often 45, $50,000, then we, the college will help you repay your student loans, uh, until the loans are paid off until your income goes above that upper income threshold. So that is an easy promise for students to wrap their minds around. It's an insurance backed program and like other insurance, there's several pages of terms and conditions. There's a lot of detail. The student has to graduate. They have to be working. There are some pro probations if they're not working full time or if their income is a little bit less than that $45,000. But the promise is very simple for a student to understand.
Speaker 3 00:10:28 We sell the program to colleges and then the college gives it to students. So the college has a more complicated question of how do we choose who to give this to so that we, the college can make money and give it to students where we can change enrollment and let's bring in more students. So we, the college can increase our revenue. Uh, you asked about comparing it to other things like income based repayments. Some people compare us to ISAs, uh, income share agreements. So the income based repayment is a feature in federal government, student loans that is also income driven and is very similar to what we're doing with LRA. It's interesting to talk to families about the income, the IBR feature in federal loans, families don't trust the federal government. They're afraid the feds, the, the Congress will pull the rug out from under their students, or if they're the student pull their out rug out from under themself before they graduate and before they need the help, because everyone knows Congress, you know, fiddles with program AMS changes them to make them less expensive.
Speaker 3 00:11:22 Generally, although in the recent years, uh, there's been a lot of talk about how to make college more free and make it more accessible. But it it's interesting how little families trust the federal government not to change that program in any events. It's a great program in the federal student loans. We wrap around that we're more generous than that program for the federal student loans. And we also, uh, cover, uh, private loans that students often have to take. And parent plus loans that mom and dad, dad often take to help support their students. Uh, we also get compared to income share agreements, and those really are very different for a college. Usually an income share agreement is used to help a student borrow a few more thousand dollars when they can't get the loans for that. So if a student really truly can't get enough loans to attend the college, the ISA can fill that last gap we're used in a very different way. We're used for students who certainly can borrow the money they need to college. And they're just reluctant to that are nervous to borrow it.
Speaker 2 00:12:16 So getting us a bit on track with sort of the founding story of our day education solutions. So you have this idea of LRAPs. You think this can be a pretty good program that helps students and client institutions around America. Did you start this venture alone? If not, um, who did you start this with and how do these people continue to inspire the company?
Speaker 3 00:12:39 So in some sense, yes, I started by myself. I was the only one in the company at the beginning, but started it with a number of advisors who have been great. And, uh, a lot of them are still involved. Uh, every day as we work, the first one, I've already mentioned Stevie indel. He was associate Dean Yale law school. It's really his idea that we're taking out to, uh, colleges and universities across the country. And he's had a lot of really good advice about how to balance the program. So it is really beneficial for students, but also affordable for colleges and gives colleges a good return on their investments. Uh, with Steve, I should mention Carol Stevens. Uh, he was associate Dean for advancement at Yale law school raised a lot of money in the program when they launched it. He's got a great network across higher education in the us has introduced us to a lot of people has been a really good source of inspiration.
Speaker 3 00:13:22 Someone else right away who started as an advisor was Matt Osborne, who was VP for enrollment at spring Harbor university. I began to know him at Greenville college when I was a student there. And by the time I was right to launch this, he had become VP for enrollment at spring Arbor. So he signed up not only as our first client, but it talked to me every week and gave me ideas on how to make the program work better for him and for his students and for the college. So really great to have that kind of feedback, right, as we launched, uh, he has joined us. He's now one of our top sales guys, which is fantastic. Uh, we're taking the program out to other colleges and universities should mention Justin Mead. We needed an insurance partner as we launched the program. And the first company I found, uh, Justin was there as their chief operating officer. Uh, he left them eventually and he joined us and now he's our chief operating officer and it's great to have him on the team. So those are four people who are involved very much at the beginning at the beginning, giving us great advice and are still involved today.
Speaker 2 00:14:17 Wow. Yeah, that's super lucky to have such a great group of people that I can attest are very intelligent and hardworking, amazing people. So, but of course you're still a startup. Um, and most startups I just read actually before this interview, 90% of startups fail. So 14 years later, our day education solutions is still standing here. When did you know, Ardeo could be a great company, it could succeed at going from startup to now,
Speaker 3 00:14:49 There have certainly been a lot of setbacks and challenges along the way, but it was great as soon as we launched. And it took a long time to launch. We had to get regulatory approval and that just takes a long time, right? Bureaucracies move slow. But eventually we had all the paperwork together and eventually got the approval. And as soon as we got out into the field and started talking to students and families, their reactions were fantastic. Some of this students cried because it's made such a difference in their life. And it was really neat to, to confirm that my personal experience was not super unique, right. Instead there were lots of students and families out there who say, wow, this really makes a difference in enabling me or enabling my son or daughter to go to the college they want to go to. So that was great to go out there and get that feedback. And with so many families giving us great feedback with so many people asking, can I buy this for my son or daughter? Um, it was just really neat to know that there was a demand for it and we could really help change people's lives. And then we just had to build the business around it to make sure the business would survive.
Speaker 2 00:15:47 That's amazing. I'm sure many of the listeners, probably a majority of the listeners listening all are relating to your story, especially the fear of student loan debt, one making college decisions. So what would you say was the hardest part in the early stages of the company's growth or generally any adversities you had to overcome?
Speaker 3 00:16:06 Well, we had two that were really hard, right outta the gates. I launched in 2008 and ran right into the great recession in two, 2008, 2009, made it just impossible to raise any capital from, uh, venture capital companies. So we had to bootstrap and just go along with whatever little bits of money we could raise from angel investors. And eventually we raised a fair bit from angel investors, all told, but made the start much more difficult than I thought it was gonna be. Uh, the other early hardship we had to overcome was we hired a woman Ruthie Wellhouse. She was great, became a good friend, uh, was a great saleswoman, was taking this out to lots of colleges. And then she got cancer and passed away, which of course was a horrible thing for her family. But also from our business perspective was, uh, a real setback and slowed us down.
Speaker 3 00:16:50 So one of our conference rooms is named after her. And, uh, the name we is Dale really comes in memory of her. She had on a, a signature for her email, the quote that, uh, from, well, it's attributed lots of different people, but the quote that says education is not the filling of a bucket, but is the lighting of fire. And she really loved that quote. And we would talk about that. And so when we went to choose a name later, we started association and then changed our name to Ardeo Education Solutions. And we chose Ardeo because it's the Latin word for, to burn with passion and links right into that quote from Ruth about, you know, really we are passionate about the life changing impact of higher education. And we really do wanna light a fire to make it possible for people to follow their dreams. And so, uh, we was neat to have her influence on the company was neat to have known her, uh, really wish that she was still with us obviously. Uh, but, uh, was great to have her as part of the team. And then we just had to overcome that loss and move on, uh, a little bit more slowly.
Speaker 2 00:17:49 Yeah, of course. Um, it's great to hear that. Of course, that is unfortunate tragedy, but it did help our DEO become the company. It is, and Ruthie was able to influence Ardeo, you know, become Ardeo literally. And so do you have any advice for other startups that may face similar adversities or just generally have the issues that come with being a startup company?
Speaker 3 00:18:14 Well, two thoughts there. One is that building the culture is every bit as important as building the business. Ruthie had a huge impact on the culture that we developed as a team. And it really, you know, when I was by myself, the culture was myself, but every time we added people after that, and she was the third hire and, uh, was with us for several years. Every time we added people, the new hires always of course impacted what that culture was, cuz they brought ideas themselves and they contributed how we built the culture. So certainly some advice to, uh, founders, as they start companies is pay a lot of attention to the culture, invest in it and it really matters. It really helps attract employees and make, uh, make the place a is worth living and worth working. Uh, the other advice I have is that, you know, most startups are bootstrapped most do not get venture capital funding and bootstrapping is totally different than when you get venture funding.
Speaker 3 00:19:02 The decisions you have to make are different. The pathway you take is different. Almost all the publications about startups are written from a venture capital funded point of view. So I really encourage founders when I talk to them to think about, are they, are they, are they very soon gonna be venture funded or are they on the bootstrapping pathway? And then when they look for advice, when they read advice, find the advice that is applicable to them and don't be misled by some advice that just is a different situation. If you have venture money than if you don't. And there's so much advice on Google, I spend time every week reading about other startups, reading advice from founders. There's just really great advice out there that, uh, you really need to invest in, in order to understand the decisions you're facing as a, as a founder, as it grows.
Speaker 2 00:19:43 So as you mentioned, our day was a bootstrap startup. So what were those differences you found or hardships that you faced because of that?
Speaker 3 00:19:53 So one of the big differences is hiring people. Mm-hmm <affirmative> so we were bootstrapped and there was never enough money to do all the things we needed to do. So for years, when we went to hire someone else, we would look around and see, where do we have the greatest pain points? And who's the cheapest person we can hire to do the work that needs to be done. And that's such a contrast to someone, to a company that starts with a bunch of venture capital money. And they start by saying, who are the three or four people that we need, who are the best in the world at doing this, whether it's marketing or, uh, building, you know, software engineering, let's go hire really great people. And then we'll put, put a team underneath them to support them. And that, that lead gives you a very different organizational structure, a very different set of, of internal capabilities. Uh, eventually as we grew, we got to the point where we could start asking the question, who's the best candidate we can find, let's go hire them. But for years we would just hire people at minimum wage and hope they could do a good enough job to move us forward. And they did. And we built a great team.
Speaker 2 00:20:49 Yeah. Thank you so much. And so like you said, our day was founded during the great recession and 14, almost 14 years ago, I think. And so I'm sure the market has changed quite a bit since then. And so I was wondering how has it changed and how has it affected the way Ardeo operates?
Speaker 3 00:21:07 So in some ways it hasn't changed very much at all. Colleges and universities really don't change rapidly, but the entire world is changing, right? The entire world is embracing the internet and technology. And that is, uh, uh, sorting through every organization out there in every industry. What is really different today than 14 years ago is how much people are talking about the problem of student loan and how do we solve this problem of student loans and what can we do to give relief to students from the burden of having to repay it? So it doesn't change their whole life after graduation. So it's neat to have so many more people talking about this issue that we're working on every day. And we have a great solution for
Speaker 2 00:21:43 That's interesting. I wonder during the great recession, was there not a lot of conversation about student loans or do you think people were going to college less? Or what was the difference in that general narrative where people just not talking about student loans as an issue?
Speaker 3 00:21:57 It wasn't that they weren't talking about student loans, but I think every decade, since student loans originated, students have borrowed more colleges have raised tuition. So 30, 40 years ago people borrowed student loans, but it was a relatively small amount and people didn't worry about it too much. And then starting maybe 20 years ago, you had people who were borrowing 50,000 and more. And while those are rare cases, they start generating a lot more conversation. And the average student today still only borrows $28,000, but media stories make it sound like they borrow thousand. And a lot of people know someone who borrowed 50 or a hundred thousand or they've heard that story, right? And it's, uh, those can be really horrible stories where people get out with so much debt that it really does hurt the rest of their life for years. Um, and while those are rare stories and most students do have only a smaller amount and most students get a job that pays well enough that they can pay back their loans.
Speaker 3 00:22:49 They're a lot of students who come out and they struggle for several years until their income rises. And that's really the group. We try to help. We try to help that when their income is low, we make their loan payments. And as the income rises, then they can pick up the loan payments on their own and take that pain point away. But I think it's really common for people to know a nephew, a niece, or the son or daughter of someone at work has struggled to repay their loans. And I think that's, that's those stories have become so much more common, which I think is why people pay much more attention to it today.
Speaker 2 00:23:20 That makes sense. And so next, I kind of have the biggest question of all for you. What is your ultimate goal for our day education solutions as the founder?
Speaker 3 00:23:31 Well, I think air every student should have a safety net that Elara provides. So they don't have to worry about where they go to college. You know, the fear of student loans should not change where a student goes to college. It shouldn't change what they study. It shouldn't change the job they choose after graduation. So I personally, and I think, you know, everyone who works at our Dale, we really want to get these L wraps in the hands of every student. So they can go to the college. They wanna go to, they can study whatever they wanna study, follow their dreams, pursue their passions and not worry about repaying their student loans not let them be a burden on their future.
Speaker 2 00:24:03 Thank you. Yes. That is a very admirable goal. And following up with that question, I have to ask what is next for Ardeo.
Speaker 3 00:24:12 We are growing every year. We're adding people to the team. We're working with more colleges, we're working with more students. I just think that's gonna continue for a long time into the future. We love working with more students and every time that we get to the chance to at work with a new college, it's just a lot of fun,
Speaker 2 00:24:26 Well Peter thank you so much for being such a wonderful guest today. That's all the questions I have for you. And you've brought so much wonderful information about your personal story and how our DEO education came to be. So is there anything else you'd like to add?
Speaker 3 00:24:42 If any listeners wanna reach out to me with any questions? Happy to take questions. I'm at
[email protected], Ardeo is A R D E O. So feel free to reach out to me,
[email protected] And thank you Vi for having me.
Speaker 2 00:24:54 Yeah, of course. Sounds great. Thank you so much again, Peter.
Speaker 3 00:24:57 Thanks.
Speaker 1 00:24:59 This podcast is brought to you by Ardeo Education Solutions. Ardeo Education Solutions provides loan repayment, assistance programs, known LRAPs to increase access and enrollment at higher ed institutions. Ardeo's LRAPs help graduates with modest incomes, repay their federal student parent plus and private alternative loans. The powerful promise they provide, give students the confidence. They need to enroll to learn more about Ardeo. Visit us on the web at Ardeoeducation.org.
