A new lender looking to rationalize borrowing for “middle-of-the-road” university students opened its doors yesterday.

Called College Ave, the service is backed by Fenway Summer, the joint investment and advisory business that has backed such startups as alternative lender Prosper, virtual currency service Circle, and student loan management tool Tuition.io. The site resembles the new wave of personal lenders such as Lending Club and Karrot, with a clean interface and an emphasis on transparency.

Student loans total $1.3 trillion, according to a November report on consumer credit from the Federal Reserve. The cost of a college education has continued to rise sharply since the credit crisis, as jobs for college grads have stagnated. Raj Date, former deputy director of the CFPB and CEO of Fenway Summer, said that the credit crisis led him to believe there was an opportunity for “a profound rewiring of banking services,” and this led the company to be an early stage investor in Prosper and Finovate alum Tuition.io.

In April, Fenway Summer acquired part the San Francisco-based wholesale mortgage lender Ethos, but student lending has remained top of mind to Date. The average student borrower today holds nearly $30,000 in debt. Perhaps not coincidentally, $30,000 is the upper limit  College Ave is currently lending.

The student loan market today barely makes sense, Date said. “In the future, it will not make sense.” This statement could probably be widened to include the university tuition model as a whole. It has become a mantra among alternative lenders to say that the old credit models are dead, but this is not exactly true, Date said. “The existing credit models work for a fraction of the population,” he said. “They don’t work for thin-file 19-year-olds.”

College Ave, according to Date, will be a “middle of the road lender,” rather than one catering solely to prime and superprime borrowers as, for example, Social Finance does. Still, the College Ave site gives potential borrowers just three options for their credit scores: Good, Better and Best. Student lenders tend to skew upmarket, because they are lending to people who are gaining skills to help them earn more money.

New lenders, Date said, need two skill sets beyond the traditional ability to manage risk. The first is the ability to properly harness the large amount of data that exists around customers, and to have systems that can learn and improve their risk models. The second is regulatory savvy — the ability to foresee new regulations and see how they may affect the lender’s business model.

And of course, all lenders need to steer their businesses between the twin dangers of defaults on one side and disparate impact on the other.