Homero Coss, 23, moved with his family from a Mexican border town to Texas when he was just three years old. Growing up in Laredo, he decided he wanted to become an osteopath. But, like the other Dreamers, he didn’t have access to Pell scholarships or federal student loans to attend college, let alone medical school.
Coss ended up winning a scholarship from an immigrant youth program called TheDream.US to attend the University of Texas Rio Grande Valley. But medical school still seemed out of reach. So he returned home, teaching science in his hometown, thinking he would work and somehow save money for school fees.
A year and a half later, he received good news: TheDream.US was piloting a new initiative called Dreamers Graduate Loan Program. Was he interested? As soon as he could, Coss applied and got a loan to cover his tuition at a low interest rate. He is now in his first year of medicine at the Texas College of Osteopathic Medicine. “Every day I wake up and can’t believe I’m here,” says Coss, the first person in his family to attend college.
Coss benefits from a recently launched $ 100 million graduate student loan program for Deferred Action for Childhood Arrivals (DACA) and Temporary Protected Status (TPS) recipients who wish to pursue further education professionals, but cannot access public loan programs due to their immigration. status.
Impact finance and non-profit advisory Social Finance is the manager of the fund. And Funding U, an education lending platform serving top performing and underrepresented students, processes applications and grants loans.
Fill a gap
The initiative was born out of TheDream.US college scholarship program. Launched in 2014, it awarded money to approximately 7,500 Dreamers to attend more than 75 partner colleges. Students are more likely to graduate than the average American and with a higher GPA, according to Tracy Palandjian, CEO and co-founder of Social Finance.
But those responsible for the program realized that there was another need: to help students pay for their higher education. A year ago, the organization decided to fill this gap by focusing on loans, as raising the funds necessary to pay the full scholarships would be prohibitive. Together with Social Finance, they worked out the details. Then they asked Funding U to be the originator of the loan. The goal: to match the federal subsidized graduate loan program open to U.S. citizens, with an interest rate significantly lower than the amount required by private loan providers.
Ultimately, the fund hopes to raise $ 100 million to enable 1,500 TheDream scholars to pursue higher education. The focus is on institutions with a high graduation rate and a “comfortable debt-to-income ratio,” says Palandjian. This means degrees in fields such as dentistry, law, and engineering, as opposed to, say, the humanities.
So far, they have raised $ 30 million in grant equity and repayment guarantee from the Pershing Square Foundation, as well as several other philanthropists and impact investors. This money will take a prime, subordinate position to better encourage the participation of other investors. The Ford Foundation provided grants to develop the program.
Funding U also provides financial education, to ensure applicants understand the loan terms and the payment plan. The regular four-year business activity helps underbanked students get money for the ‘last mile’ for everything from tuition to living expenses, using data and analytics to take better loan decisions. (For example, his analysis includes “academic” and “coarse” scores for taking out loans).
Meanwhile, Coss is studying hard, planning to focus on neurology or psychiatry. “It’s a demanding program, but it prepares you for the rigors of the job,” he says. “And I appreciate it.”