This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Educational Funding Startups Looking To Usurp Sallie Mae

NEW YORK ( MainStreet) --If you graduated at any point in the last fifteen years or so, it's a pretty good bet that you took out some fairly hefty student loans to pay for that degree. After all, there are over 37 million student loan borrowers in the U.S. and their average individual debt load hovers around $24 000. But what if it wasn't Sallie Mae holding the note for your education and demanding monthly payments, but a well-off private citizen who wanted to invest in your career potential and expected to be repaid from your future earnings? It may sound crazy, but two startups are seeking to put a Renaissance-era spin on educational funding by reviving the patronage model.

Pave, founded Sal Lahoud and Oren Bass, launched in December 2012. The site allows pre-screened young prospects - new grads or those soon to graduate - to post campaigns seeking funds for their education or career ventures. Backers can donate to these campaigns and are repaid with a percentage of the prospect's income over the next ten years.

Also see: The Rise of the 529: How to Afford College

"The idea came to me when a friend asked to borrow some money to pursue his passion," Lahoud said. "I wanted to help, but I didn't want to find myself in the awkward position of having to ask for repayment should things not work out with his projects." Lahoud wondered if, instead, this could be something more like a revenue share.

 

"I would provide the funding needed, and if he did well, I suggested we share in that success," Lahoud said. "Conversely, during times of hardship, he would not be responsible for sharing earnings. Thinking historically, didn't patronage used to work in the arts and sciences in a similar fashion?"

 

Upstart, founded by a group of former Google employees, has a similar mission and financial backing from such heavy hitters as Mark Cuban. Founder Paul Gu says that a desire to prevent promising grads from making career decisions on the basis of money alone was what motivated his team to launch their platform.
1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
AAPL $126.44 0.00%
FB $87.28 0.00%
GOOG $523.40 0.00%
TSLA $280.02 0.00%
YHOO $39.38 0.00%

Markets

DOW 17,730.11 -27.80 -0.16%
S&P 500 2,076.78 -0.64 -0.03%
NASDAQ 5,009.2140 -3.9090 -0.08%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs