Lumni USA: Best New Artist
A student works hard, earns good grades and is accepted to the college of her dreams. However, even after federal aid, which tops out at $25,000 over four years, large tuition payments still remain. For many low-income students, finding loans to cover the rest of the costs may be a challenge, as most lenders require a creditworthy co-signer. But financial background isn’t necessarily an indicator of a student’s potential—that’s where Lumni USA comes in. The company finances students based on merit and their potential chance of future success.
“It’s incredible when you look at somebody and it’s just so clear: they have all the tools for success on the personal level—all they really need is someone to believe in them and invest in their future,” Noga Leviner, CEO of Lumni USA, said. “We look at those students and see them as an asset, rather than a burden on our society.”
According to Leviner, there’s a $30 billion annual funding gap faced by qualified undergraduate students who stand a good chance of graduating and going on to successful careers. Research by one student suggests that lack of funding will prevent 5 million students from receiving their bachelor’s degrees in the next decade alone.
Lumni USA provides a financing mechanism to pay for higher education in a way that is sustainable, scaleable and student-friendly. Loans are repaid with a set percentage of future income over a given period of time. This model eliminates the threat of unaffordable loan payments and makes higher education accessible to those traditional financing neglects. Students also receive additional training and resources to support career development and help them maximize their potential.
We believe that higher education has a really high payoff and high return on investment for both the individual and society,” Leviner said. “It should be available to everyone who is qualified.
Lumni USA is part of the growing family of Lumni companies; the financial service company also operates in Chile, Columbia, and Mexico. In 2008, Lumni USA was formed to bring the innovative model to students in the United States. The company received B Corp Certification in 2011 and, despite daunting regulatory challenges, financed its first class of 30 students. Two-thirds of its students are low-income, two-thirds from under-served minorities, and two-thirds are first-generation college attendees.
“We are transforming the lives of students that otherwise might not get an opportunity to go to college and have a successful bright future,” said Leviner. “There doesn’t have to be a tradeoff between providing students with a fair, flexible financial product and giving our investors a solid investment opportunity.”
Lumni’s business model has the potential to transform the field of education financing. As Lumni scales, it can assist millions of students. Over the last five years, it expanded from $1.5 million in assets under management to $25 million, reaching 2,500 students globally in 2011.
Leviner believes Lumni’s impact can only continue to grow. “Given the need for a more rational market for investing in human capital, the sky’s the limit for how far we can take this,” she said.
Find out more about LUMNI USA