From WSJ: Business-school alumni networks have long been useful for
finding jobs and securing startup funding. Now, students and graduates are
tapping them to help pay for school.
Young companies are using crowdsourcing to call on alums to
ease the debt burden of M.B.A. students from their alma maters, offering
low-cost loans to students while rewarding investors with returns topping 4%.
The startups use a "peer-to-peer" or "group-to-group"
lending model, where multiple lenders invest money in funding pools earmarked
for each participating school; the funds are then disbursed to groups of
borrowers.
The new crop of lenders comes at a time when student lending
overall has become a risky endeavor as unemployed college graduates struggle to
meet repayment commitments. Even M.B.A. students—who generally have strong job
prospects and high earning potential—have had a hard time getting loans from
cautious lenders….
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