Written by:
Jimmy Connolly

GreenNote

In this economic slowdown, colleges are hit just as hard as Wall Street. From June 2008 to January 2009, Yale's endowment fell 25% and Harvard estimates that its endowment may fall by 30% by the end of this June. Here at Princeton, administrators estimate that the drop will be around 30% for this coming June. When endowments fall, universities are stuck with a problem--how to deal with financial aid. In some cases, the students brunt much of the blow as financial aid provided by colleges does not rise to account for the financial hardships of students' families.
One place students can turn is a new startup called GreenNote, which looks to pair students with loans based on their activities and career goals. University of Pittsburgh student Caitlyn Christensen writes about GreenNote in The Pitt News--

A newly formed company has combined the powers of social networking, microfinance and the Internet with the ambition of making student loans efficient and attainable.

GreenNote, an exclusively online alternative loan company, now offers students another lending option for financing their educations.

“My business philosophy is very simple,” said Akash Agarwal, co-founder and CEO of GreenNote. “I believe that there is a tremendous amount of money out there, and students should be able to get that money without credit ratings or high interest. Through the power of the Internet, technology and joining small amounts of money together, we should be able to help them.”

GreenNote incorporates an aspect of social networking as well:

Through the GreenNote Web site, students create and submit online profiles detailing community service involvement, activities and educational goals. The students also designate how much money they need to finance their educations — this can be as little as $1,000 or it can be the entire cost of four years of schooling.

GreenNote does not provide money for loan, but connects students with those who wish to finance education, like family members, friends and community leaders. The lenders pledge a certain amount of money to contribute toward the lump sum.

Another neat part about the company is that students borrow and repay their families, friends, and other donors versus banks or corporations:

Students don’t need a credit rating to determine their eligibility, because they borrow from friends and family members interested in helping them. For this same reason, GreenNote has no co-signer requirement either, Akash said.

After a six-month grace period following graduation, students pay off their loans to family and friends, not to banks or conglomerates.... When it comes time for repayment, students send the money to GreenNote, which repays the lender.

Check out the full article here.