Student loan initiative: Alumni lend to current scholars to finance college


Benjamin Kessler, 27, financed some of the $150,000 he borrowed for graduate school with loans from alumni at his university, the Huffington Post reports. Can former students help solve the student loan crisis? That’s the reasoning behind a new loan initiative launched last year at Stanford University, one of the nation’s most elite and expensive colleges, where undergraduate tuition is now $40,050.A handful of Stanford alumni created SoFi, a company that funds student loans with investments from alumni. The company is based on the peer-to-peer lending model popularized by microfinance organizations and websites like Kickstarter.com. SoFi grew out of a recognition that the student loan market is “unsustainable,” said SoFi CEO Mike Cagney in an interview with The Huffington Post. “You’ve got the government, the school, the students, and nobody is invested in another’s success … If you take the government out of the equation and introduce alumni, you create those connections and that investment.”

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