Kiva Labs - Access to Education

Demand for education
is higher than ever.
Financing options
aren't keeping up.

Sources Photo by Ken Harper

The challenge

Higher education is expensive. Most students can’t afford school without grants or scholarships, both of which are scarce, especially in developing countries. Other barriers such as poor transport and school infrastructure, and the lack of information on education financing pose major challenges. All of these factors leave behind millions of students every year, perpetuating an intergenerational cycle of poverty for families everywhere.

Problem #1: Lack of access to education due to insufficient financing

Many financial institutions choose not to lend to students because they consider the risk and opportunity cost too high. While in school, most students are unable to work full time and make regular repayments. Most students have no prior credit history, causing them to be perceived as high-risk borrowers. Young people everywhere lack collateral. This is doubly true for low-income students who are also likely to not have parents or future employers to guarantee them.

Proposed solutions

  • Loans for tuition providing affordable credit allow more students to pay for school. And when they graduate, they’ll have the potential to earn much more than before, making it easier to repay their loans once they’re employed.
  • Flexible loan terms, grace periods and longer loan terms allow students to focus on their education and spread the financial costs over time post-graduation.

One partner’s innovative approach

Maharishi Education for Invincibility Trust, in South Africa provides long-term tuition loans for high quality vocational and distance learning.

Problem #2: Expenses beyond tuition can derail students' education

Even students enrolled in high quality education programs are often unable to take full advantage of their educational opportunities due to high costs of student living, books, laptops and other important items. Students from poor families must meet their essential needs—food, clothing,shelter and transportation—first, but often don’t have financial support for those needs.

Proposed solution

Loans for supplies and living expenses allow students a better chance to succeed. They need credit for laptops, uniforms, books and more. Providing flexible capital for these supplies helps students focus on school and become more employable in the modern job market.

One partner’s innovative approach

Kepler, in Rwanda, provides loans to students to purchase laptops and for partial tuition coverage.

What is success?

We want to help build a student loan market that enables capable students to thrive. We define success as:

  • Increased enrollment: More students with the credentials enrolling in universities, vocational schools and training programs. And in time, new generations of high wage earners and ethically-driven leaders emerge across sectors.
  • High repayment rates: Students able to earn enough money upon graduation to repay their loans.
  • Strong credit histories: Students establishing good credit through regular repayment on loans, setting them up for financial success later in life.
  • Demonstration effect: Proof that students are viable long-term investments so that traditional financial institutions start funding student loan programs.