Better Than A Student Loan?

David Bornstein profiles the social enterprise, Lumni, which offers “human capital contracts” to fund underpriveleged students during college:

In exchange for $8,530 in financing, [Columbian nursing student Jairo Sneider] agreed to repay 14 percent of his salary for 118 months after he graduated. At that point, regardless of how much he has paid, his obligation terminates. … If he ends up earning the average salary for nurses in Colombia, he will end up paying the equivalent of an interest rate of 17 percent, which is the average rate in the country for a student loan. And if he ends up doing better, he will pay more, and Lumni will share in his success.

Lumni has made similar deals with 1,900 students to date. Fifty five percent of them are women and 90 percent are the first in their families to attend college. Most of these students would have otherwise been unable to pay for college. So far, the default rate is under 3 percent.