Common Bond, the New York City-based student loan refinance startup, laid off ten employees last week according to industry sources. Among them were Beth Starr, head of the company's capital markets effort.
Starr had been on the job for six months and came to Common Bond from Jefferies & Co., where she was managing director and had arrived following the collapse of Lehman Brothers, where she had worked for 17 years. Sources say CFO Morgan Edwards has taken over in her stead. A Common Bond spokesperson declined to comment.
Headcount at Common Bond is in the 51 to 200 employee category according to company-supplied information on LinkedIn. CrunchBase, which tracks companies, estimates 101 to 200 staffers. There are about 50 people in the group photo on the company's website. Splitting the difference among the three, 5% to 10% of Common Bond's staffers were let go.
An off-the-record source within the company said the notion that these layoffs amounted to news was "a red herring," stating that "it's a non-event on our end," and, referring to the headcount reduction, added "it's something we do from time to time; (it) keeps the organization healthy and strong." The source said that new equity financing, the acquisition of another company in the space and a new senior executive hire would likely take place in the coming weeks.
Common Bond is aligned with the peer-to-peer lending model of Prosper Market Place and Lending Club—which laid off 12% of its staff on Tuesday—that brings person-to-person lending and crowd-sourced financing to student loans, where outstanding debt has reached roughly $1.3 trillion. Between 85% and 90% of student loans are made by the U.S. Department of Education, and while ED allows its loans to be consolidated, it doesn't refinance them.