100 dollars can fund an entire university degree?
Over time, yes! Here's how:
- Your 100 dollar contribution will fund a student in Ghana through one university subject this year.
- When this student graduates, they will repay 30% of their employment income for a period of 6 years or less. This money will be reinvested to support another student through two university subjects.
- When that student graduates, their repayments will in turn support another student through four university subjects. Over time, the money will continue to multiply.
- In 25 years, the 100 dollars you contribute today will support an entire university degree! Not only that, but it will have helped support many students along the way. And it will continue growing after that.
Why are we doing this?
We are a social impact startup inspired by the problem that for many students in developing countries, a university degree is out of reach simply because they are unable to pay for it. We believe that education has the power to transform lives. And we believe it's possible to remove financial barriers to higher education.
Benefits of Higher Education:
Individual benefits:
- Better employment opportunities
- Improved health outcomes and longer lifespans
- Next generation more likely to advance their education
- More skilled workforce and economic growth
- Increased political participation
- Reduction in crime and violence
The Impact
- If we reach our goal, the money from this crowdfunding campaign will support 10 students through university in Ghana this year. We provide students with full funding (tuition, fees, books/supplies, housing, and a living stipend), so they can focus on their studies.
- When these 10 students graduate and begin working, the money they repay will be reinvested to support 20 new students. Over time, the numbers will continue to grow.
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Even if we don't reach our goal, we will still contribute all the money to education support.
Your Contribution:
- Your contribution will be used to support students in Ghana according to our model. This means student repayments are reinvested in new students! In addition to financially supporting students, we provide them with regular mentorship and support in seeking employment.
Our Model
Unlike a traditional loan, where graduates are expected to repay the full amount plus interest, we ask graduates to repay a fixed percentage of their income for a set number of years.
This income-based repayment model has two advantages:
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It is better guarded against inflation than a traditional loan. In developing countries, uncertainty about inflation leads to very high interest rates on traditional loans. Furthermore, students from disadvantaged backgrounds are often ineligible for loans due to a lack of collateral.
- It lowers the risk for students, ensuring that they never end up with debt they can't repay. Our model includes a minimum payment level, so if a student cannot find well-paying work, he or she is not expected to repay.
What about Scholarships?
Scholarships are another vehicle for supporting talented students through university. However, scholarships are generally limited to a few students. With our model, money used to support students grows over time, so we can support increasing numbers of students through university. In twenty years time, the $20,000 from this campaign will be worth over $100,000 in student support!
Is it Fair/Ethical to Expect Repayments from Students?
More About Brighter Investment
Brighter Investment allows private investors and/or private donors to fund the education of deserving students from disadvantaged backgrounds. When funding is provided as investment, investors can choose to collect student repayments or to reinvest the repayments to support additional students. We target a return on investment (ROI) of 9%. When repayments are reinvested they are used to support increasing numbers of students.
Risks and Challenges
- Life does not always go as planned. Students may need to repeat a semester or may drop out of university, and graduates may default on their repayments. We have incorporated estimates of these events in our financial models. We believe that cultivating strong relationships with students offers the best protection against the risk of default.
- As a startup, we are continually learning, growing, and adapting. Over the next year, we will be raising capital to expand our program and scale our model. We believe that once we have established our model using the funds from this campaign, we will attract investors who are interested in investing in companies with scalable social impact and high growth potential. However, even if we fail to raise capital to grow our company, we are committed to supporting 10 students from this campaign throughout their degrees.
FAQs
- Is 30% a lot? Graduate incomes are 3x-5x higher with a degree. A fixed repayment percentage of 30% means students repay for a relatively short period of time. A student who receives support over their full 4-year degree will be debt-free within 6 years; a student who receives support for 2 years will be debt free within 3 years. This includes a national service period where students are not expected to repay.
- What if a student defaults on their repayments? We believe that building relationships is one of the best ways to prevent students from defaulting on repayments. Over the course of their degrees, Brighter Students will get to know one another, and will be in regular contact with a mentor through our program. Because some things are outside of our control, we have also included a default risk estimate in our financial models.
- What if a student doesn't find a job? Students are not required to repay until they find a job with salary above a minimum payment threshold. We provide career support to students, and are building a network of employers in Ghana.
- How do you select students? Students are asked to provide standardized test scores and a teacher recommendation as part of their application. Research has shown that a teacher recommendation is one of the best indicators of student success.
- Do you support all degree programs? We have researched the earning potential of various degrees in Ghana. As we launch the program, we are focusing on students with high earning potential - primarily Science, Engineering, and post-graduate degree programs. Over time, we hope we can expand our list of supported degrees.
- What type of mentorship will students receive? Students will be in regular phone contact with a Ghanaian student mentor, who will serve as a friend, guide, and support. Once/semester they will meet this mentor in person.
- Are you active at particular universities Ghana? We have partnerships with three reputable universities in Ghana: University of Ghana (UG), Kwame Nkrumah University of Science and Technology (KNUST), and University of Mines and Technology (UMaT). We will expand to more universities in years to come.
- Why Ghana? We are launching our program in Ghana because of good employment opportunities, a stable government and limited corruption. At the same time, fewer than 5% of young people in Ghana attend university. We believe our model would work well in other countries (such as India, South Africa, and Indonesia) and we hope to expand to other countries once we have established our program in Ghana.
Other Ways You Can Help
We understand that not everyone is in a position to contribute financially. If you support our mission, you can still help in the following ways:
- Spread the word on Facebook, by inviting your friends to our site, or re-posting
- Use the Indiegogo share tools
Thanks for your help in making higher education accessible to deserving students!
