When Lying to Get $175 Million Goes Wrong!

Описание: What exactly did Charlie Javice say to JP Morgan to get $175 million dollars in funding from them? Find out in this video!

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JP Morgan
When one of the biggest banks in the world says it has spotted a company to buy, the finance world pays attention. Back in September 2021, JP Morgan paid the whopping sum of $175 million for the purchase of a small, very unknown company called Frank.

Frank & Friends
Having struggled herself to make payments for her own college education, Javice had a strong motivation to create Frank– the stress of having to get financial aid to go to college was grueling. Back in 2016, when she started the company, Javice was seen by many as a knowledgeable woman when it came to the media with enough first-hand experience in the financial aid sector.

Financial Aid
While studying at the University of Pennsylvania, Javice said she had major problems while applying for financial aid: the forms were very confusing to her. Her issues with the forms were discussed in a couple of interviews in which she stated that even her parents, who both had master’s degrees, were confused by the forms too.

Red Flags
In 2016, Javice started promoting a website named frankfafsa.com. In it, the company promised a money back guarantee scheme for students applying for financial aid who didn’t receive at least $1,000 off their tuition. Turns out, the Department of Education took notice of the website, and quickly took legal action.

Strange Math
What was really worrying was how Frank’s number didn’t add up. The amount of customers the platform had was disproportionate to the amount of teenagers entering colleges in the US. And even if many of them received help during their FAFSA, it still didn’t make 5 million people in 5 years.

JP Morgan Interest
There’s still a lot to be understood as to why JP Morgan had such an interest in Frank. They even went as far as proposing a $20million upfront payment as a retention fee so that Javice would stay during JP’s merger. Not only that, they were in it for the long run: JP Morgan’s intention was to be able to work with all 5 million customers through Frank for many decades to come.

Frank Ending
Federal laws protect certain student data from being accessed by institutions and colleges. While this may be true for them, it was unclear if a company like Frank, which did not’ directly work with the information, would fall under the federal law’s protection.