Repay-man

David Boctor was on the hunt for a good business opportunity, and that meant paying attention to the front page of The New York Times.

Over and over again, he read articles about an apparently widespread student-debt problem.

“I find when a story continually shows up in a newspaper, and gets high visibility within that newspaper, there’s an indication that there’s a problem for a lot of people because, obviously, the readership is fascinated with this problem,” Boctor recently told the CN&R from his home in east Chico.

“So, my job as an entrepreneur is to figure out, how do I take what is a social and national problem and figure out how that … manifest[s] itself as a personal/individual problem that I can work on,” he added.

Cut to Monger.com.

Boctor, a co-founder of one of Chico’s leading employers, the popular home improvement retailer Build.com, created Monger about four years ago. He describes it as an online retailer with a rewards program designed specifically to help people pay off their student loans.

Monger members can shop the website for everyday items such as soap, coffee and cereal, in addition to electronics, furniture and home improvement products, and earn points with their purchases. The points—one point equals 1 cent—are then converted into a monthly loan payment, which is sent to a lender.

“Monger is … a very specialized company,” Boctor said. “It has a particular benefit that you can’t get at Amazon that matters—or can matter—to a very particular customer.”

As he sees it, the student-loan problem isn’t related to the balances that people carry but rather the inability to make payments on those balances.

About two-thirds of students who graduated from public and private nonprofit colleges in 2017 had student loan debt, owing an average of about $28,650, according to the Institute for College Access and Success. And currently, borrowers with federal direct loans in default total about 5.2 million, according to the U.S. Department of Education.

“I determined that the most important part of creating any solution for student loan borrowers—to make their lives better—is going to involve payments,” Boctor said, “because … it’s the point in which the problem actually occurs or shows itself.”

Boctor, 43, grew up in the Shadow Hills neighborhood of Los Angeles, playing soccer and football in high school while nurturing a love for science. He earned his bachelor’s in anthropology at UC Berkeley before enrolling in a computer science graduate program at Chico State, where he met classmate Chris Friedland.

Together, Boctor and Friedland started a company called Faucet Direct, selling faucets online and incorporating the business in 2000. Faucet Direct, Boctor said, was his graduate project, though he never defended it before his professors and ultimately dropped out of school. The company, however, quickly grew over the next seven years and would eventually become Build.com.

Friedland says he considers Boctor a visionary who is interested in chasing big problems and whose thinking can be years ahead of the pack.

“I’m more a get-shit-done-now” type, Friedland said, adding, “I’m more pragmatic, and he’s a little more idealistic.”

The combination worked for the pair, and they remain friends, Friedland said.

Boctor said he and Friedland sold Build.com in 2007, with Boctor leaving the company about 18 months later flush with cash in a weakened economy.

“At some point I opened my eyes and saw the real estate market had tanked,” he said. “I actually started doing some home improvements and flipping houses” but found many others had the same idea, resulting in too many people pursuing too few properties.

That’s when Boctor shifted course. Instead of flipping homes himself, he began loaning money to investors doing their own flipping.

“Essentially, I started loaning money to real estate speculators who were doing renovations on properties in Sacramento and Chico,” Boctor said. “I did the underwriting of those loans … the marketing of those loans and the servicing of those loans. And that’s the part I liked the most—the servicing, which is kind of boring, but I found it really fascinating.”

He said he didn’t realize it at the time, but his work servicing loans would become a cornerstone of the business he’s continuing to build with Monger, which he says operates at a loss but is undergoing a transition toward becoming a type of company he believes does not currently exist—one that will be an advocate for a borrower, countering the efforts of loan servicers and lenders who “work together to essentially extract as much money out of a borrower as possible.” It could be quite lucrative, he said, if done right.

Boctor says Monger will maintain a retail presence moving forward, but the intention is to grow beyond retail into a type of business that helps people come up with money to aggressively pay down loans and reduce the cost of borrowing.

“I think what’s needed is another type of company whose fiduciary responsibility is to the borrower and acts as an expert—a financial expert—to essentially help the borrower make good decisions to make a loan as unprofitable as possible.”