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Brighter Investment: Enabling investment in higher education [Updated Jan 15]

We enable investors to invest in students' university degrees. Students repay a fixed percentage of their income after graduating.

Photo of Heather Mann
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Who is the target audience for your idea and how does it reimagine the cost of college?

Brighter Investment enables investors to support the university education of talented students who face financial barriers to furthering their education. Students receive full financial support over the course of their university or technical degree. In exchange, students repay a fixed percentage of their after-tax income for a period of six years or less following graduation. Income-based repayment ensures that students are never burdened with insurmountable debt.
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PROBLEM: In developing countries, higher education is out of reach for the majority of high school graduates simply because they are unable to pay for it. Scholarships and financial aid are grossly insufficient to meet the level of need. Banks do not give out student loans because uncertainty about inflation makes unsecured loans very risky from a banker’s perspective and/or unaffordable from a borrower’s perspective.  This is true even though a university degree can multiply a young person's earning potential by 3-5x.

MISSION: Our mission is to enable investors to safely invest in the university education of talented students in developing countries with a model that financially benefits both students and investors. Despite the high returns, students in developing countries are struggling to finance their higher education. At the same time, the amount of socially responsibly invested assets has grown with 7-10% per year in Europe and North America in the last 5 years.

MODEL: The way Brighter Investment works is simple: funding provided by client investors is pooled and invested in talented students in developing countries. In exchange, students repay a percentage of their income for a set period of time after graduation.  A combination of social, practical, and legal incentives coalesce to ensure students make their monthly repayments to Brighter Investment. With the help of universities, banks, and high schools, we ensure that this model runs efficiently and reliably.  

Brighter Investment charges a management fee over the invested capital for recruitment, mentoring, career support, collection and a profit margin.  Our for-profit model is sustainable and scalable, allowing us to provide increasing numbers of students with access to higher education.

BENEFITS: Tying repayments to students’ incomes means that, unlike with traditional loans, successful students repay more than less successful students. This reduces the financial risk for students, as it ensures that no student will ever end up with insurmountable debt. Since repayment is based on graduates’ wages, and wages rise with inflation, income-based repayment also provides a hedge against inflation.

The estimated financial return for client investors is a stable, inflation hedged and competitive 9% per year. The value offered to the students is even larger. Their income is expected to increase a factor 4. They are also more likely to own a house, have health insurance, have educated children, be healthier and be happier.

MARKET: An estimated 60 million high school graduates per year have the grades and ambition to further their education, but lack access to the required financial means.  Based on factors like political stability, corruption, inaccessibility and ROI of higher education, quality of education, unemployment and ease of doing business, we have begun implementing our program in Ghana, where 120,000 qualified high school graduates/year require 1.1 billion in funding to continue education.  We are planning expansion to India, where 12 million graduates/year require 140 billion to continue their education.

To learn more, visit our website: www.brighterinvestment.com


UPDATES!

1. Link to our Team Bios

2. Link to our Hypotheses and Assumptions

3. Link to interviews with students, professors, financial institutions, and employers

4. Photos of our work so far:

Getting to know one another at University of Mines and Technology, Ghana
A student signing on for Brighter Investment funding
One of our students, looking forward to his first class!
With administrators at Kwame Nkrumah Institute of Science and Technology, Ghana


What early, lightweight experiment can you try out in your own community to find out if the idea will meet your expectations?

We are currently piloting our model with a group of 9 university students in Ghana. These students are at different stages of their undergraduate degrees. We are also supporting 15 students in Ghana in a 4-month vocational training program, which will allow us to test an income-based repayment model on a shorter time scale. Our focus is on developing countries, where the return on investment of a university degree is high.

What skills, input or guidance from the OpenIDEO community would be most helpful in building out or refining your idea?

If you are interested in learning more about our initiative, investing, or have ideas for us, please get in touch!

Are you interested in the Path to Pitching track we've developed for this challenge?

  • Yes

Evaluation results

9 evaluations so far

1. Does this idea make college more accessible, especially for low income students in the U.S.?

Yes! - 33.3%

To a degree - 22.2%

Not that I can tell - 44.4%

2. Does this idea think beyond current cost structures of college and activate new sectors or partners?

Yes! - 66.7%

It's attempting to - 22.2%

Not that I can tell - 11.1%

3. How excited are you about this idea?

I'm so excited I just can't hide it! - 44.4%

I'm pretty neutral in my excitement level - 33.3%

I don't feel very excited about this idea. - 22.2%

8 comments

Join the conversation:

Comment
Photo of Karen Sorensen
Team

Hi Heather-- This is a super cool idea for emerging markets. Working in emerging markets can be really challenging, since each market is so different depending on regulations and social conditions, but these markets are so important for the stability of our society. Jus wondering what happens if something happens to the student before they repay the debt like they die or become disabled? Are their family members responsible for the debt? Really curious how you get investors to invest? I see you are interested in creating a secondary market for the debt, so that could build investor confidence that if they are in a cash strapped position they can unload the investment. Also, was wondering what % of students would be considered 1st generation students? I will keep an eye on your model really super interesting. Thanks Karen

Photo of Joanna Spoth
Team

Karen Sorensen see Heather Mann 's response above since her reply didn't make it to your comment. :)

Photo of Heather Mann
Team

Hi Everyone,
Thanks for your comments!  We have been a bit slow getting going with the Refinement phase, but hope to post some updates from user interviews this week!  

Karen, currently the funding for our students has come from a crowdfunding campaign, which was based on donations rather than investments (the money from student repayments will be recirculated).  We are now targeting accredited investors and impact investment funds.  I'm not sure what you mean exactly by 1st generation students in our context.  We have not established an insurance policy in the case of death or disability, but the contract would be null and void rather than transferring to a family member (so our company takes on this small risk).

Alex, one of the main factors we consider in our research is the ROI of a university degree (which factors in both the cost of the degree and the impact on future earnings).  In the USA, the ROI of a degree is actually lower than in many developing countries because the tuition costs are so high.  So, a solution such as ours may need to be paired with models that find ways to control or lower tuition costs.

Heather

Photo of OpenIDEO
Team

We’re thrilled to have you in our Refinement phase, Heather! We were excited to read that your idea is currently being piloted in Ghana and would love to learn more about how it’s going. If you’re creating any sort of impact reports or capturing stories from your students, we’d love to see them uploaded as attachments. While this OpenIDEO challenge is focused on ideas in the U.S., we’re eager to learn from the analogous work you’re doing internationally. As thoughts come to mind about differences between the work you’re doing and how the system operates differently in the U.S. or other locations, please keep us in the loop! Again, we’d love to learn from the work your team is doing and continue to recognize your efforts through the challenge and our networks.

In the Refinement phase, we’d love to see you continue developing the viability, desirability and feasibility of your idea. The following are some feedback and provocations to consider. What are some initial learnings your team uncovered that inspired the creation of this idea? Do you have end user interviews that you pulled from? How about your current students? Are they excited? Are there assumptions you’re still testing? The pilot period is such an exciting time.

Here are some key questions and milestones we encourage from all ideas in the Refinement:
1. How might this idea address the unique needs of low-income families and first generation college students?
2. Clearly summarize the value proposition of your idea in 1-2 sentences
3. Identify assumptions that need to be answered in order to validate your value proposition.
4. Collect feedback from potential partners and users to answer the assumptions you’ve identified.
5. Communicate your idea in a visual way with user experience maps http://ideo.pn/UX_Map

Lastly, here's a useful tip: When you update the content of your post, it'd be helpful to indicate this in your idea title by adding an extension. For example, you can add the extension " - Update: Experience Maps 12/22" to you idea title. This will be a good way to keep people informed about how your idea is progressing!

We’re excited to see this idea progress in the next weeks!

Photo of OpenIDEO
Team

Congrats on making it to the Refinement Phase Heather! In the next few days we'll be sending you additional feedback to help you take this idea forward - so be on the lookout for that. We're looking forward to how this idea will grow!

Photo of Edmilson Rodrigues
Team

Hi Heather. Wonderful idea and initiative. I am a fellow entrepreneur in the education finance space. Please, can you email me so we can talk about how we can cooperate? My email is edmilson@edudream.co

Photo of Shane Zhao
Team

Exciting to see EduDream and Brighter Investment connect!

Heather, we'd love to hear updates from your current pilot in Ghana. It'd be helpful to post updates and feedback in your idea post. 

Photo of Alexandra Alden
Team

Hi Heather! Alex here from Path to Pitching, love your idea! Would love to hear more about how you are piloting the initiative, how many participants? What has feedback been? Also would love to see some interviews with your users!

Check out our Human Centered Milestones which you can use as a reference in your design process: http://bit.ly/1N6hgbQ