September 23, 2010
Economista: Why Micro-lenders Will Replace Sallie Mae
There seems to be a new trend taking root when it comes to college financing. Last week, I wrote about companies adopting a micro-loans model for student lending. Days later, micro-loan giant, Kiva, announced it was expanding its small business social lending to students seeking to get through school as well. Even though Kiva’s program is only for students abroad at the moment, this expansion demonstrates how college financing or student loan debt assistance is taking a social approach.
“Micro-lending seems like the most efficient way to tackle this student debt problem,â€ says Shawn Agyeman, director of marketing for SponsorChange.org. “If we wait for national reform it’s going to take a lot longer,â€ he adds.
SponsorChange.org is another organization seeking to attack the student debt problem head on. Its efforts are two fold: attract top talent to nonprofit organizations seeking volunteers to help out, and aid students in getting a handle on their school loans. Those admitted to the program will work a maximum of 50 hours in up to four months, though project hours and project length can vary.
Nonprofit organizations receiving the help also have a vested interest, says SponsorChange.org co-founder, Raymar Hampshire. They are responsible for contributing 40% of the total payment amount.
Once projects are completed, funds are transferred directly to the student loan account. “So far we’ve paid out close to $8,000,â€ says Hampshire.
Hampshire and his brother, Robert, conceived the idea in 2007 while having a conversation bout micro-financing. “At the time we said, ‘How can we use this to help people pay down student loan debt?’ But instead of paying it back, they could pay it forward,â€ says Raymar. The brothers officially launched the site in 2009.
Who’s eligible to apply? Anyone with a degree–undergraduate, associates, or vocational certification–and debt from a tertiary institution.
If you’re interested in becoming a volunteer, head over to SponsorChange.org to sign up.
SponsorChange.org is also in the midst of a $300,000 fundraising campaign to provide more volunteer and loan assistance to graduates. “We want to eventually offer programs to corporate employees to give skills to nonprofit entities,â€ says Alicia Shipman, program director.