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by ISL
3017 days ago
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Students are generally informed in writing about the impacts of student loans, but they sometimes regard loan providers as predatory once the loans come due. There is a chance here for both the student and Pathrise to benefit from working together, but the social interaction (and understanding that students sometimes make life-choices that they later regret) must be navigated with a deft touch. An up-front payment for Pathrise's services, assuming that they work, would appear to avoid any future sadness; the student could finance the interaction with an outside financier. Coupling the financing directly to the service may cast an unwarranted shadow upon an effective job-placement service. |
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One of the ways we handle this now is we actually ask the students to consult their family before signing anything. We also allow the students to still drop out of the program at no liability within the first two weeks.
The problem with upfront payment is that we are no longer held accountable by aligned incentives. The most predatory thing about student loans is that you still owe the same amount of money regardless of your outcome. I think our income share agreement is designed to be much safer since in almost every case where you pay anything you are also capable of paying it.
For students in exceptional situations, we'll even waive their dues or retro-actively offer financial aid since we didn't design the program to be a future burden. The way we see it, helping out a student in need in any way pays back tenfold in terms of reputation later.