AS CONGRESS WORKS TO REVAMP STUDENT LOAN PROGRAMS, BROTHERS Raymar and Robert Hampshire have started their own loan initiative.
In April 2009, the brothers started SponsorChange.org (www.sponsorchange. org), a Pittsburgh-based philanthropic organization that helps college graduates earn payments toward their student loan debt in exchange for volunteer service. Raymar, 28, is a full-time graduate student pursuing a master's in public policy and management at Carnegie Mellon University Heinz College. Robert, 32, is an assistant professor of operations research and public policy at Carnegie Mellon.
"Many college grads have to take a second or third job in order to make ends meet," says Raymar, whose own $25,000 in undergraduate student loan debt is in deferment because of his status as a full-time student. "Our program gives them the opportunity to do something more meaningful, utilize their skills, and give back to their community."
The issue of student loan debt and record rates of defaults has been at the forefront of public debate for many years. In September, Education Secretary Arne Duncan announced that the student loan default rate for fiscal year 2008, the latest data available, has reached 7%, up from 6.7% in fiscal year 2007. And according to the Project on Student Debt, the average undergraduate debt for 2009 is $24,000. For the Hampshires, the statistics add urgency to the need to assist debt-weary college graduates with options to help them repay student loans.
Under the ambitious program, college graduates are matched with nonprofit agencies to do skills-based service projects. Here's how it works: SponsorChange.org assesses the needs of various nonprofits to define projects that have a narrow scope and a finite end date. Once the specific need is determined, SponsorChange.org recruits and screens college graduates who have student loan debt, and sends the nonprofits, corporate sponsors, and private donors a list of possible volunteers. The nonprofits make the final selection. Participants in the program have an average debt load of $25,000 and an average monthly payment of $200. After a student completes a service project, the funds they earn are automatically transferred to the student's outstanding loan account. Funds can be paid through nonprofit grants, corporate sponsors, or private donations. Service projects include business and leadership training, homelessness awareness programs, healthcare...