Can start-ups stop the world's students drowning in debt?

We spent some time a couple of weeks ago talking about how university students can pay for their studies in Spain and in other parts of the world. In Spain most of them rely on their parents, but not in many other countries where they have to get a part-time job or use student loans.
Here you have part of a very interesting article by Tom Jackson Technology of Business reporter, and published in BBC News.

It's tough being a student these days. Debt levels are reaching crisis proportions in many developed countries, the World Bank says.

And in many developing countries, aspiring students can't get finance at all.
In the US, where private funding is the norm, $1.3 trillion (£1tn) in education loans is outstanding. In the UK, the government-backed student debt burden is nearly £90bn.
And trying to find the best way to finance your university or postgraduate education can be a confusing business.
"I remember feeling overwhelmed by some competitor lenders," says Alex Kubo, 28, an MBA [Master of Business Administration] candidate at the University of Pennsylvania in the US.
Luckily for him, he came across one of a new breed of lenders harnessing data analytics to make better loan decisions and cut costs.
Online lender CommonBond offered him a fixed interest rate that beat the other lenders he tried. How was it able to do this?

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Debt burden

And there is evidence that student loan debt is holding people back.
Research by UK charity Central YMCA found money worries to be the biggest cause of stress among people, with students being particularly affected.
"The idea of the 'skint student' isn't just a stereotype," says Rosi Prescott, the charity's chief executive. "It's the reality for thousands of our students up and down the country who have to scrimp and save just to ensure they can afford to stay in university semester to semester."
The International Finance Corporation, an arm of the World Bank that offers investment and asset management services, says student lending in many developed countries is in crisis, and that emerging markets need to come up with new ways to fund learners.

In Africa, for example, only 8% of people have a higher education degree, and banks and microfinance institutions devote less than 1% of their portfolios to student loans.
Yet few government loan programmes can keep pace with demand.
"Existing loan products are structured with prohibitive terms that make them difficult to repay," says Jennifer White, founder and chief executive of Student Finance Africa, a loan company.
"They have short repayment periods and collateral requirements. Even students who do access higher education frequently drop out due to financial constraints."
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Her company has designed its own credit scoring algorithm to tackle this, helping make informed lending decisions on clients who may not have a credit history. So it looks at alternative data, such as mobile money transaction history and academic performance.
"Our loan structure also requires borrowers to make minimal interest payments during school in order to continue qualifying for loans as they progress through their studies," Ms White says.
"Thus their history of payments will also be used to inform our credit scoring model."
This approach has never been tried before in Africa and has met with a positive response, she says.
The company is launching its programme in Kenya in three schools, and will begin official lending early next year.
Ms White is confident of reaching 15,000 students over the next five years.
"Tech is an enabler," she says. "Advancements in fintech (financial technology) - particularly around alternative data and credit scoring - are enabling us to break down traditional barriers to finance and lend to a group that was once considered far too risky to lend to."

 You can read the whole article here: Students loans