Stifling Our Startups

Student-loan debt is crippling entrepreneurship in the U.S.—and not just in obvious ways

- By Leigh Buchanan

ERIKA KULLBERG did everything right.

In 2015, during her third year at Georgetown Law, she and classmate Jimmy McNamara founded ReferU, which added a social dimension to the referral of new tenants for apartment buildings. The partners made their way around a conference for the apartment-management industry, memorizing the names and faces of big players they wanted to approach. There, they scored meetings that produced verbal commitments from three property-management businesses.

Wanting a mentor, they reached celebrity VC Chris Sacca by trying multiple permutations of his Gmail address, and landed a Skype session. Interns came on board. Angels began to circle.

In February 2016, Kullberg assessed her situation, weighing the potential of ReferU against a lucrative offer from international law firm Morrison & Foerster. The deciding factor in favor of the legal job: her $200,000 in student-loan debt. In April, a month shy of graduation, she and her similarly indebted co-founder reluctantly shuttered their fledgling business.

“I really wanted to pursue the startup,” says Kullberg. “But student loans are handcuffs.”