We are the only social venture of its kind that uses a direct support model that accepts everyone who wants to serve and we serve them by connecting them to sponsorship for their service, declares Robert Hampshire, co-founder and co-director of Sponsorchange.org (www.sponsorchange.org ) a Pittsburgh, Pa.-based company that provides a viable alternative to incurring massive student loan debt for college students.
Hampshire, 32 and his younger brother Raymar, 28, started the humanitarian and mostly web-based business in 2007 while each worked in higher education and business. Robert is an assistant professor in finance at Carnegie Mellon University in Pittsburgh and Raymar is a former wealth manager and financial consultant. Throughout their careers, the siblings interacted with thousands of college graduates that were mired in student loan debt. Under the ambitious initiative, college graduates are matched with nonprofit agencies to do skills-based service projects. In return, Sponsorchange.org pays the participants student loan bills.
We assess the needs of various non-profit programs and we recruit college graduates who have student loan debt, Raymar says. We match those graduates with nonprofit organizations that have a need to complete community service projects. Once the student completes the service projects, the funds they earned are automatically transferred to their outstanding student loan account. So, what would have initially been volunteer work is now actually earning money to help pay off student loan debt.
Many grads have to take second and third jobs in order to make ends meet, Raymar says. Our program gives them the opportunity to perhaps do something that is more meaningful to you while giving back to your community and utilizing your skills. The business is currently in a start-up phase, however, annual operating costs of Sponsorchange.org is about $300,000. The Hampshires invested about $15,000 in personal funds to launch the business.
The issue of student loan debt and record rates of defaults has been at the forefront of public debate for many years. Recently, U.S. Secretary of Education Arne Duncan announced that the number of student loan defaults increased by 7 percent in 2008, up from 2007. Americans now owe more on student loan debt than on personal credit card debt. According to statistics from the U.S. Department of Education, the median federal student loan debt carried by students earning associates degrees at for-profit institutions between 2008-2009 was about $14,000. For students earning an undergraduate degree, the debt jumps to about $24,000. The sour economy and cuts in federal education funding has made the process of finding scholarships and financing higher education a burdensome task for many. The populations most impacted by burgeoning student loan debt are first generation college students and students from low-income families.
While the news may be somber and bleak for millions of current and former college students, for the Hampshires, the statistics add credence to the urgent need for an effective and cogent initiative to assist debt-weary college graduates with options to repay student loans. We thought by using the principles of micro-financing, we could help solve the student loan crisis, Robert says.
According to the brothers, principles of micro finance or micro credit include innovations that provide essential financial services to millions of people who may be deemed too risky by traditional financial entitiesincluding banks or investment firms. By zeroing in on the student loan crisis and applying the concept of participating in community service projects for nonprofits, the brothers are collectively addressing the student loan issue and helping to serve some of the needs of the community. Sponsorchange.org is a platform for micro donations, he adds. It allows people to make donations, have a personal connection to a college graduate. Its also a way for people to sponsor and donate to real change for the community and the non-profit organization. Sponsorchange solicits private and public donations from sponsors. One of the things we often hear from graduates is that they dont have enough time to commit to volunteer or community service work, Robert says. Our program provides an economic resource for a college graduate saddled with student loan debt. The Hampshires contend that there isnt a shortage of opportunities for people to volunteer. Service projects include business and leadership training; homelessness awareness programs; health care services and job training exercises.
For example, one of the organizations most recent success stories is Sheena Hancock, a graduate of the University of Pittsburgh. Hancock completed a four-month project at the Wilkinsburg Boys and Girls Club in Wilkinsburg, Pa., last year. She worked as a leadership development counselor and established a program to teach young people training and leadership skills at the facility. After completing the program, Hancock received $600 from www.sponsorchange.org and $400 from the Boys and Girls Clubs of America. A total of $1,000 was transferred directly to the holder of her student loan. The Hampshires say there is not a limit to the number of service projects an individual can complete in any given period. We connect donors, college students and non-profits to achieve greater results in the national service rates of economically disadvantaged college students, Robert says.
The brothers have received thousands of inquiries for participation in their program. One of the most notable supporters of community service programs includes President Barack Obama. Since taking office, Obama has been steadfast in his advocacy of community and volunteer programs and frequently encourages millions of people to become engaged in various community events and outreach and service programs. We are looking for foundations and corporations to partner with on an ongoing basis, Raymar says. Our program is transparent and the funds participants earn are earmarked for student loan debt and nothing else.
Sponsors can track how and where their funds are spent via the organizations website. For example, when a sponsor donates to a particular nonprofit service project, the donor can track the status of the project and see how their donation is being utilized by the agency. By tapping into the underutilized resource of volunteer support for non-profits, we are making it possible for everyone to have access to the funds they need to attend college, Raymar concludes.