Sunday, June 21, 2009

Markets in Everything: Direct Donor-Student Loans

NY TIMES -- Unithrive, which made its debut last month, matches alumni lenders and cash-strapped Harvard students, who post photographs and biographical information and can request up to $2,000. The loans are interest-free and payable within five years of graduation.

The nonprofit site is the brainchild of three recent Harvard graduates, who hope it can help ease the crisis in paying for college, especially if it is one day rolled out to other colleges that cannot afford to be as generous as their alma mater, which already awards scholarships to all students with demonstrated need.

The appeal of direct donor-to-student loans, Unithrive’s founders say, is that alumni will have a personal connection to current students: those requesting loans list hometowns, majors and classes they have taken. Alumni can lend to students with whom they feel a bond. They are promised updates 3 times a year from students they support - not unlike the letters that sponsors of poor children in Africa receive through the Christian Children’s Fund.

4 Comments:

At 6/21/2009 9:58 PM, Blogger sethstorm said...

It's one thing to consider the Ivies, the real problem is the masses.

That's where the funding issues need to be solved. Selective universities can largely fund the students if they really wanted to do so. Open admissions universities do not have such luck.

 
At 6/22/2009 1:40 PM, Blogger Robert Miller said...

This comment has been removed by the author.

 
At 6/23/2009 10:02 AM, Blogger DaveinHackensack said...

This isn't about charity, and it's not primarily about extending credit to student borrowers -- the loans are capped at $2k. As I noted when I blogged about this at the time ("How to Borrow Money and Network at the Same Time"), it's about building relationships between students and alumni:

"This is a clever idea, based on an old, counter-intuitive principal of human nature: the quickest way to make someone your friend is not to do him a favor, but to ask him to do a favor for you. That this was the brainchild of Harvard alumni isn't surprising considering that Harvard seems to have the most effective alumni network of any elite school."

 
At 6/23/2009 4:00 PM, Blogger Robert Miller said...

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