Friday, August 29, 2014
Sell a % of Your Future Income for Cash Now
You can sell a % of your future income to rich backers in exchange for college tuition now.
Upstart encourages students to go their own way. This is how it works: Beginning in the spring of their junior year, college students or recent grads—anyone from a poet who wants to start a literary magazine to a business major looking to build a boutique hotel in Brazil—can apply to be an “upstart”. The applicant is screened to make sure they are who they say they are and the company predicts how much money they will make over the next decade. That information becomes their funding rate, which helps determine how much they can borrow and how much they will need to repay. On average, for every $6,000 a student wants to borrow, they must pay back 1% of their income. (Right now, Upstart is very selective about the students it accepts—they want people with high-quality profiles and clear goals—but in the future Girouard says they would like less of the arbitrar of who is funded, so long as a set of minimum requirements are met, and let the marketplace decide.)