Entries in college tuition (1)

Monday
Jun152009

Social lending for education financing

Harvard students already have the best deal in the country when it comes to higher education financing--the university absorbs all tuition costs for families making less than $60,000 per year--but now they have another exclusive option. UniThrive connects Harvard students with Harvard alumni for interest-free loans up to $2,000.

The Harvard location is a good test bed. The university's massive endowment is proof of its dedicated (and successful) alumni who want to feel a continuing connection to their alma mater. Harvard students are also likely pretty good bets for reliability.

The site integrates the peer-to-peer connection by allowing lenders to browse student profiles to find the prospective borrower they most relate to. The student is then required to write his/her lender a couple times a year with updates.

The site is an important step forward in the education financing debate. PeopleCapital also focuses on the student lending market, as we've profiled, but this direct college link may be an important differentiating factor for Unithrive. Only individuals with .harvard.edu e-mail addresses can access the site, creating an Ivy League in-club of trust and transparency. $2,000 is a tiny amount, however, and it will be interesting to see if the site evolves to allow lenders to earn interest. After all, if Harvard students are a good bet for reliability, why not make some money on investing in college students' futures?