Student Loans for College dreams
In several countries of Latin America, less than one third of students begin college. In a region where private universities are prohibitively expensive, Lumni, with the collaboration of the Multilateral Investment Fund (MIF), has created a market-driven and scalable solution to higher education financing. Lumni designs, structures and manages funds that provide merit-based financing with repayment schemes based on fixed percentages of future income.
Lumni develops funds in partnership with individual investors, corporations, universities and non-profit partners. As a social enterprise, Lumni focuses on clients hailing from low-income families, most of whom are the first generation to attend college.
The project has already exceeded its initial 2,150 target loan with 2,197 loans disbursed to talented youth who would otherwise have no access to higher education. Updated projections estimate an increase to 12,000 loans by 2013. Salary levels of graduates combined with default rates indicate the effectiveness of Lumni’s model as a social enterprise, since they show otherwise disadvantaged youth securing higher-paying jobs.