Imagine graduating from university with no debt. Imagine getting an education without worrying about paying back gigantic loans when you graduate. Imagine asking backers to fund you and your dreams. That’s what Upstart is all about. Upstart is a crowdfunding-type service that allows college students to ask backers for money that can be used towards education.
In return, investors receive a percentage of a person’s future salary until an investor is paid back in full. The concept is an original one, and it’s also an idea that just may save some students a lot of trouble when it comes to graduating successfully.
How Upstart Works
If you’ve ever visited a site like Kickstarter, you’ll grasp the Upstart concept right away. College students can create a profile that includes an investor plea. Part of the profile portion includes questions about what a person is currently studying and what that person intends to do after graduation. So, for example, if I were currently studying law at Harvard, and I wanted to start my own firm when I graduate, this information would be added to the Upstart system.
From there, the system generates a pledge amount based on current salary standards. This amount is the amount that a student is permitted to ask investors for. 1% of a future salary will also go to any investor who has backed a student, until that initial investment has been paid off.
If a student makes less than $30,000 in any given year, that 1% does not have to be paid, but additional years will be added to the loan length. In the end, gathering education dollars through private investments adds up to less than obtaining government or private loans. In some ways, Upstart provides a solution the massive loan problem happening in the United States. But, Upstart raises some questions too.
Comparable to Owning a Person
In some ways, asking another person to invest in you can have an interesting connotation. Some may assume that buying stock in a person means owning that person in part. However, Upstart founders assure their audience that this is not the case at all. A loan is simply a loan and nothing more than that. Once that loan has been paid off, students may choose to remain in contact with backers who act as mentors or not.
Upstart provides an interesting solution to the standard student loan problem. All too often, students graduate with too much debt. This debt prevents promising students from following dreams and obtaining good jobs. Instead, student focus is on paying off loans after graduation by any means possible, and this mentality has to stop. Upstart could be the solution to student loan issues.
So far, a number of college students have gained backing from investors. In order to gain investor dollars, you must visit the site and go through the signup process. To back a student, you must be able to donate in increments of $100. Take a look at the Upstart website just to see what this service is all about!