Lumni: Revolutionizing Access to Higher Education

By Nina Angeles

As a cur­rent stu­dent in Pro­fes­sor Shaughnessey’s Social Entre­pre­neur­ship course, my peers and I have explored sev­eral areas of the devel­op­ing world this semes­ter, eval­u­at­ing high-performing social enter­prises with a height­ened focus on sus­tain­abil­ity. At the begin­ning of each lec­ture, Pro­fes­sor Shaugh­nessey presents an orga­ni­za­tion for his stu­dents to ana­lyze and deter­mine whether it deliv­ers a sus­tain­able social impact effi­ciently, or exe­cutes its oper­a­tions in a sub­op­ti­mal fash­ion. Because of the increased need for a uni­ver­sity edu­ca­tion in today’s job mar­ket, Lumni, a lead­ing enter­prise in the sphere of financ­ing human cap­i­tal, main­tains the for­mer by invest­ing in the higher edu­ca­tion of stu­dents and hence their earn­ing potential.

 Co-founder and CEO Felipe Ver­gara cre­ated Lumni in 2001, work­ing closely with stu­dents from low-income fam­i­lies strug­gling to pay for higher edu­ca­tion. Often, Lumni’s clients are the first gen­er­a­tion in their fam­i­lies to attend col­lege. Through a fund man­age­ment model, Lumni allo­cates invest­ment funds, based on an investor’s aim of social and finan­cial returns, to eli­gi­ble stu­dent can­di­dates in need of finan­cial assis­tance. In return, stu­dents com­mit to pay a fixed, gen­er­ally small per­cent­age of their salaries within a time­frame of 120 months after grad­u­a­tion. These terms of agree­ment are based on the expected income of the pro­fes­sion a stu­dent pur­sues. By cov­er­ing the costs of edu­ca­tion, Lumni has opened a door to stu­dents who may not have the finances or gov­ern­ment aid cur­rently to sup­port their aspi­ra­tions of becom­ing nurses, teach­ers, or engineers.

What makes Lumni suc­cess­ful? To begin, Lumni oper­ates on both for-profit and non-profit funds, a hybrid busi­ness model that is most favor­able to gen­er­ate a long-term, sus­tain­able impact. With the help of pri­vate investors, busi­nesses, uni­ver­si­ties, and non-profit part­ners, Lumni has helped thou­sands of stu­dents gain access to a uni­ver­sity edu­ca­tion despite the finan­cial strains they face. Lumni’s solu­tion to financ­ing higher edu­ca­tion is scal­able, in the sense that with grow­ing funds, more stu­dents in the Latin Amer­i­can region and even beyond can access higher edu­ca­tion, espe­cially if pri­vate fund­ing con­tin­ues to sup­port Lumni’s endeav­ors. Lastly, Lumni’s mean­ing­ful, social impact can yield a life­time of dif­fer­ences socioe­co­nom­i­cally. Stud­ies have demon­strated that with a higher edu­ca­tion level comes a higher earn­ing poten­tial. With that in mind, grad­u­ates may be able to then pro­vide for their own fam­i­lies. These stu­dents, who are often the first to attend col­lege in their fam­i­lies, then start an edu­ca­tion legacy, rais­ing the next gen­er­a­tion to the stan­dard of also obtain­ing a higher education.

 For the major­ity of the world, edu­ca­tion is a uni­ver­sally embraced and essen­tial tool that can mobi­lize the change we seek to pro­duce. Whether that change takes place in Boston or in Chile, access to a higher edu­ca­tion ulti­mately empow­ers the dif­fer­ence we strive to make in any field we pur­sue as North­east­ern stu­dents. To quote Maya Angelou: “When you know bet­ter, you do bet­ter.” As I con­tinue to learn how to eval­u­ate social enter­prises, I under­stand what is nec­es­sary for my future career as a social entre­pre­neur. By sup­port­ing the edu­ca­tion of stu­dents strug­gling finan­cially, Lumni presents an oppor­tu­nity to pro­vide the means for indi­vid­u­als to suc­ceed in life.