What if you could trade your student loans in for something more productive?
Student debt in the US — all $1.3 trillion worth of it — is a big problem that doesn’t seem like it will be going away anytime soon.
The average Class of 2016 graduate has $37,172 worth of debt that they’ll need to find a way to pay off over the course of the next ~10 years. That equates to an average monthly payment of around $350 — a sizable sum for someone who just graduated from college.
Paying down that much each month severely limits your ability to save, and as a result threatens your financial stability. There have been countless studies on how high student debt loads are causing Millennials to put off things like buying a house, getting married, and others.
But what if it didn’t have to be that way? What if you could trade in your student loans for something far more productive — like a mentor?
Imagine a startup incubator, but for people. Instead of paying your lending institution every month and getting nothing in return, you could raise money from a mentor that has a vested interest in your success.
Here’s how it could work:
- A graduate with student loans connects with a mentor willing to pay off their student loans
- The two parties come to an agreement on payment duration and percentage (lower than percentage paid towards loans)
- Throughout the duration of the payment period the pair works together to gain the best outcome for each other
A key point here is the advantage that this partnership creates for both the graduate and the mentor. For the mentor to give a discount on the current percentage paid towards loans, and still make a return, the mentee would need to have an outsized salary growth over the payment period. This growth would create a win-win for both parties.
Mentorship and development will drive the value. Utilizing a 1:1 or 1:2 graduate to mentor ratio creates a more vested interest in each student — an interest fueled both intrinsically and financially. Each mentor would be motivated to help their partner not only because they help someone else, but also because they are helping themselves in the process.
Admittedly, this would only be a solution most effective for a subset of graduates, but the student loan issue is big enough that it demands multiple solutions. One size fits all doesn’t work here.
Wait you think that’s it? The conversation is just getting started: write us a response and let’s hear your thoughts. We know there’s no way we can solve this alone…
For those interested, a panel of folks looking to create student loan solutions below: