With colleges struggling to provide adequate financial aid to their students, will affluent alumni step in to help?
That apparently is what’s beginning to happen. Last month three Harvard grads started a nonprofit loan program called UniThrive. The goal is to play matchmaker to financially struggling students with alumni who are happy to make interest-free loans that come due five years after graduation. In return for the loan, students promise they will update the lender three times a year. Harvard alumni have made the first loans to current students at the Ivy League school.
What intrigued me about the story wasn’t that a tiny number of Harvard alums have begun lending modest amounts of money — the max loan is $2,000 — to students. What intrigued me is the possibility that well-established microlenders such as Kiva might start lending money to college students. Kiva is a nonprofit that acts as a middleman to connect good-hearted individuals with impoverished, would-be entrepreneurs in developing countries who are looking for no-interest seed money.
This month, Kiva announced it would start lending money to entrepreneurs in the United States and that it eventually plans to expand its scope to college students.
It hardly seems a coincidence that one of the three founders of UniThrive is a cousin of Kiva’s president. This could be a test run for a much bigger enterprise.
Lynn O’Shaughnessy is the author of The College Solution and a college blogger at CBSMoneyWatch.com.