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Archive for the ‘Changemakers’ Category

SoFi Reinvents College Loans With Alumni Funding | TechCrunch

As the cost of a college education continues to rise, a startup called SoFi is offering a way for alumni to offer students financial assistance and more.Co-founder and CEO Mike Cagney describes the current student loan system as a “classic market failure,” resulting in students who are stuck with high interest rates and heavy debt that they struggle to pay off. He says that if you can remove government from the equation specifically government loans and replace it with alumni, then “you create a very virtuous cycle.”So that’s what SoFi tries to do. The company is creating university-specific funds for alumni to invest in, and those are used to make loans to students. SoFi says it’s offering to cover the full cost of attendance for participants, with loans ranging from $5,000 to $200,000. The loans are 6.24 percent fixed rate, and they can drop to 5.99 percent, lower than federal Stafford and PLUS loans and many private loans. So Students get relatively low interest rates, while alumni get a significant financial return.The benefits aren’t purely monetary. Through its website, SoFi tries to connect the participating alumni and students, for example if someone is looking for mentorship or help with their job search. Cagney notes that the loans create a financial incentive for alumni to pitch in — after all, they want students to do well so they can pay off the loans. On the flip side, he says that some alumni don’t care about making money from the investments at all, and want to use the interest payments to a nonprofit organization that will help the students something that SoFi is investigating.Of course, alumni donations are already an important source of funding for university programs. Cagney says these loans can be made from tax-deferred accounts like a 401k, so they shouldn’t divert money from traditional alumni giving.Cagney and his co-founders ran a pilot program at Stanford where they attended the Graduate School of Business last fall, raising a $2 million fund from 40 alumni. This fall, SoFi is expanding to 40 locations and hopes to lend out $150 million.As for its own funding, the company has raised $4 million from Eric Schmidt’s Innovation Endeavors, and board members Joe Chen founder and CEO of RenRen and Steve Anderson founder of Baseline Ventures.

via SoFi Reinvents College Loans With Alumni Funding | TechCrunch.

via SoFi Reinvents College Loans With Alumni Funding | TechCrunch.

New Models Destroying Old Ones, The Finance Sector is Next | Grow VC > Blog

There are sev­eral early phase com­pa­nies in the finance sec­tor that develop the new web 2.0 era or what­ever the right name is. Why can’t it be as easy as with Pay­Pal to open a bank account and trans­fer money? Why don’t we have a lot of direct invest­ment mar­kets on the Inter­net with­out high man­age­ment fees? Why couldn’t we build an invest­ment group online with our friends and work like an e-fund and diver­sify our investments?

Often the answer is, because the reg­u­la­tors and incum­bent finance com­pa­nies want to keep the old mod­els and pro­tect them. They say it is bet­ter and safer for ordi­nary peo­ple; they don’t trust that ordi­nary peo­ple actu­ally can be respon­si­ble or smart. It was the same before the French rev­o­lu­tion, the estab­lish­ment saw democ­racy as dan­ger­ous when ordi­nary peo­ple could not be trusted to make the right deci­sions. IBM didn’t believe ordi­nary peo­ple would ever need a com­puter, they thought a few com­put­ers for pro­fes­sion­als is enough. And avi­a­tion author­i­ties sup­ported local monop­o­lies and stated that state-owned-airlines offer enough options and are safer.We are now start­ing to see this change com­ing to the finance sec­tor. The tra­di­tional finance sec­tor is really strug­gling. Yet it is not only about money, it is also about how peo­ple per­ceive banks, funds and finance con­sul­tants. Peo­ple are los­ing their trust. Crowd fund­ing plays a part in this devel­op­ment. The foun­da­tion is con­stantly being built, but the rev­o­lu­tion doesn’t hap­pen over night. We as a com­mu­nity, have got a good start and step by step also reg­u­la­tors and tra­di­tional finance com­pa­nies start to under­stand our jour­ney. It is impor­tant to develop the startup fund­ing mar­ket to work well. But at the same time, it is as impor­tant that the invest­ment mar­ket works well.

via New Models Destroying Old Ones, The Finance Sector is Next | Grow VC > Blog.

Who’s behind it? | Robin Hood Tax

The Robin Hood Tax campaign started as an idea. People loved it. We became a movement. And we’re still growing.

We’re committed to reducing poverty and tackling climate change by taxing financial transactions.

We believe it’s time to rewrite the contract between banks and society.

We are charities, green groups, trade unions, celebrities, religious leaders and politicians.

We are world leaders – President Sarkozy of France, Chancellor Merkel of Germany, Prime Minister Zapatero of Spain, among others.�

We are businesspeople – FSA Chairman Lord Turner, financier George Soros, entrepreneur extraordinaire Warren Buffet.

We are economists – Nobel Prize winners Joseph Stiglitz and Paul Krugman, Earth Institute Director Jeffrey Sachs and 1,000 other economists from across the world.

We are 256,000 Facebook friends, and tens of thousands of people taking action around the UK. We are over 115 organisations, including charities like Oxfam, Barnardo’s and Friends of the Earth, all the major trade unions and faith organisations such as the Salvation Army.�

We are part of a movement of campaigns in more than 25 countries around the world with millions of supporters.

We are a force to be reckoned with, and we’re demanding justice.

Are you?

via Who’s behind it? | Robin Hood Tax.

Payments Disruption in Action — Payments Views from Glenbrook Partners

Every so often, we can be witnesses to disruptive innovation in action. It’s exciting when it happens – for those who see it. Alas, most don’t see it – although they will eventually. Which pair of glasses are you peering through?For those who can see it, there’s disruptive innovation in action at the moment in the merchant acquiring sector of the card payment system. The pieces on this particular game board are beginning to be moved around.In one case, it’s the result of the combination of powerful technology Apple’s iOS platforms in the the hands of skilled designers and engineers from outside the traditional card payment system. They’re taking a beautiful new and powerful platform and shaping it to accelerate change in a stodgy legacy world. Envisioning a new world that leaves the legacy behind. After all, why not?In another case, one of the important incumbents is reshaping its approach to an increasingly important corner of the market. It’s adapting to the new conversation that market has been having with stakeholders and beginning to evolve its traditional model into a next generation solution.I’m reminded once again of the Albert Camus quote: “Great ideas come into the world as gently as doves.” There’s a bit of fluttering going on – all around. Can you see it, feel it? Are you adapting/adjusting or just sailing along?

via Payments Disruption in Action — Payments Views from Glenbrook Partners.

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