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.