What is Altrubanc you ask? We are a big piece in the solution of addressing student loan debt in the United States. Before we explore further there are some facts that must be considered.
How many Americans borrow/have borrowed for college?
Nearly 20 million Americans attend college each year. (Source: Chronicle of Higher Education) Of that 20 million, close to 12 million – or 60% – borrow annually to help cover costs. (Source: Chronicle of Higher Education)
There are approximately 37 million student loan borrowers with outstanding student loans today. (Source: Federal Reserve Board of New York)
As of the first Quarter of 2012, the under 30 age group has the most borrowers at 14 million, followed by 10.6 million for the 30-39 group, 5.7 million in the 40-49 category, 4.6 million in the 50-59 age group and the over 60 category with the least number of borrowers at 2.2 million for an overall total of 37.1 million. (Source: FRBNY)
How much do Americans borrow/have borrowed for college?
There is roughly somewhere between $902 billion and $1 trillion in total outstanding student loan debt in the United States today. The Federal Reserve Bank of New York reports $902B while the Consumer Finance Protection Bureau reports $1T.
Roughly $864 billion is outstanding federal student loan debt while the remaining $150 billion is in private student loans (Source: Consumer Finance Protection Bureau). Private student loans are not made or backed by the federal government.
As of Quarter 1 in 2012, the average student loan balance for all age groups is $24,301. About one-quarter of borrowers owe more than $28,000; 10% of borrowers owe more than $54,000; 3% owe more than $100,000; and less than 1%, or 167,000 people, owe more than $200,000. (Source: FRBNY)
In 2010‑11, about 57% of public four‑year college students graduated with debt. They had borrowed an average of $23,800 (in 2011 dollars). About two‑thirds of those earning bachelor’s degrees from private nonprofit institutions had debt averaging $29,900. (Source: College Board)
As of October 2012, the average amount of student loan debt for the Class of 2011 was $26,600, a 5 percent increase from approximately $25,350 in 2010. (Source: The Project on Student Debt)
And what does all this produce? A 46% dropout rate!
Why you ask? The number one reason is fear of future debt.
What do the Experts suggest?
Financial aid policies in America today should reflect a new set of guiding principles:
Build on our country’s historic investment in access by helping students not just enroll in higher
education but also complete a credential with value to themselves and the economy,
Focus federal resources on the neediest students,
Innovate and evaluate new strategies to make a quality education more affordable and better suited for today’s students, including the adults enrolling in increasing numbers,
Simplify aid and present students and parents with a clear and complete picture of their college costs, repayment obligations, and career and earnings prospects, and
Hold institutions, states, and students accountable for completion.
While we may differ about the details of how to best accomplish these principles, we are united in our conviction that now is the time to act. Ultimately, the cost of doing nothing is too great for families as well as the country itself.
How does Altrubanc help?
Donor support gives the student more incentive to graduate. When a student sees the support they are receiving we believe this will further motivate the student towards their goal of graduation.
Who benefits from Altrubanc and why?
1. Students will be more motivated to reach their goal of graduation.
2. Students will graduate with less debt and will enter the workforce in a better financial standing.
3. Students will graduate with more economic power as both consumers and contributors.
1. Donors will benefit from the accuracy of their contributions by having full control over recipients.
2. Donors benefit from the graduation requirement put upon students which provides financial efficiency on every dollar they donate. Every dollar donated will produce a graduate at some point in time.
Who has an interest in the success of Altrubanc and why?
Less debt equals more economic power and freedom.
Higher graduation rates due to Altrubanc incentivizing graduation as a condition for release of donations to loan holders.
More graduates carrying less debt yield a higher probability for alumni donations and endowments.
3. Existing organizations presently issuing scholarships and or grants
These organizations will be able to better utilize their contributions due to the financial efficiency of the Altrubanc system.
4. Financial institutions issuing student loans
These institutions will increase the probability of loan repayment by encouraging loan recipients to utilize the Altrubanc system for assistance in repayment.
5. Parents of students
Parents that choose to take student loans on their children’s behalf will benefit from donations issued to their children as they attend college.
Parents can also network on their children’s behalf in the hopes of attaining donations.
6. Corporate Interests
Companies and organizations will be able to recruit talent by negotiating assistance through donations for future employment opportunities.
7. Governmental Institutions issuing Student Loans
These institutions will benefit from an accelerated repayment process from student loan holders.
Ok, so now you know why Altrubanc is needed, who will benefit and why, so let’s move onto how Altrubanc works.
Membership with Altrubanc requires a onetime registration fee. The student’s profile will remain private until Altrubanc verifies that the student is enrolled at the university or college specified during registration. Verification also includes confirmation of student loan obligations. Additionally, a cap or total amount of donations that the student can receive in donations is set.
Upon completion of the verification process, the student’s profile will be viewable and searchable to registered donors on the Altrubanc website.
As the student attends college, they are eligible to receive donations from both individuals and organizations. In the event that a student reaches 100% of their loan repayment needs prior to graduation, their account will be locked and the student will no longer be eligible to receive donations.
Upon graduation, the student will be required to provide proof of graduation (including any applicable transcripts) to Altrubanc. After this information has been validated, Altrubanc will charge the student’s account a percentage of their donations as payment for the use of the Altrubanc website. Altrubanc will then release the remaining monies to be paid to the appropriate loan holders in the appropriate amounts.
Donors will be required to register with Altrubanc in order to have access to enrolled students profiles. There is no cost associated with being a donor at any time while using Altrubanc. Once a donor has registered with Altrubanc they will have two options for donation.
1. A donor can utilize the Altrubanc search engine to find appropriate student recipients, which will show in the search results window. The donor may then choose to donate to their chosen recipients from that window and chose the amount/amounts they wish to contribute. By law since the donor has chosen the recipient the donor MAY NOT claim a charitable tax deduction for these contributions.
2. A donor may wish to make a contribution to Altrubanc’s Non-Profit. These donations will be donated to students on an as needed basis. This ensures that all students enrolled in the Altrubanc system shall receive some level of contributions. By utilizing this method of donation the donor MAY claim a charitable tax deduction using the receipt of donation from Altrubanc’s Non-Profit Organization.
In the event that one or more of the students to whom you have chosen to donate do not reach graduation those students forfeit all of their donations. As donor, you will receive notification via email of their default along with notification of the amounts in credits of donations you will be able to use to donate to new recipient students on the Altrubanc website. You will have two methods of doing this.
1. Choose new students to donate to without the ability to claim a charitable tax deduction.
2. Choose to donate the credits to our nonprofit and take a charitable tax deduction and our nonprofit will donate the funds on an as needed basis.
So where are we in our progress you ask? We are presently developing a platform and are pursuing investor interest.
If you like what you have read and believe as we do that Altrubanc is needed to continue to ensure opportunity for future students, please feel free to make a donation so we may continue to move forward towards making a better future.
Thank you for reading!