Students Have Entire Student Loans Paid For- For A Small Price - 47 ABC - Delmarva's Choice

Students Have Entire Student Loans Paid For- For A Small Price

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WMDT 47 News: We all know that going to college comes with a hefty price tag and paying off those student loans can be a big burden.  But now, some are now turning to companies like Upstart.com, where investors pay off students' loans and help them start up new businesses.  In exchange, the investors receive 1 to 6 percent of the pretax income for the first 5 to 10 years that their business is open.

Dan Ervin, a finance professor at S-U, sees little risk for students, saying, "The risk for the student is they hit it big and someone is going to get a percentage of your salary.  In addition to the money aspect, the investors are providing a mentoring aspect as well."

Nationwide, 70 percent of college graduates will have some debt, with the average being 29- thousand dollars.   And over the past three years, the declined economy makes it difficult for family members to help out. Barri Zimmerman, the director of financial aid for Salisbury University says, "its getting harder for parents to borrow loans for students, because there is a whole program for parent borrowing in addition to student borrowing, and a lot more parents are not able to get through the credit screening process for that. You see students taking out loans in their own name because they're trying to finance that education on their own, where parents were maybe able to help them in the past."

While some remain apprehensive, Professor Ervin reassures, that the only person who could be negative affected in this process is the investor.

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