ASPIRE - Educational Loan

If you ask a school proprietor in the Dominican Republic what is the greatest challenge they face as a school owner/director there is a good chance they’ll tell you, “Parents that are late or never end up paying their school fees.”  When schools don’t get money on time it makes it tough to pay the bills, the mortgage and most importantly teachers. In a recent survey Edify did, the majority of schools said that they never even end up collecting 15-20% of the students tuition revenues.  When a school is charging a mere $10-20 dollars per month the loss of those much needed dollars can be hugely detrimental to their operations or even cause them to have to close their doors.  Furthermore, the amount of time and energy that school directors spend trying to collect late fees pulls them away from their primary role of building a functioning, sound educational environment.

Fortunately Edify’s lending partner, ASPIRE, is working to solve the problem. With their recent conversion to a cooperative organizational structure, ASPIRE is able to develop an Educational Loan Product that seeks to solve the greatest threat to private schools in the Dominican Republic. Schools are now able to invite parents and offer them the opportunity to take out a loan for their students inscription fees, books, uniforms and the entire year’s tuition costs.  Parents who would normally take out a loan from an informal lender to pay for inscriptions and books now simply make a monthly payment to ASPIRE that covers these costs as well as the low monthly tuition payment. The school receives a semesters worth of parent tuition upfront, guaranteed.  They no longer have to spend their time trying to collect late payments and they can focus their attention on the most important thing, their students.  This is invaluable to the schools we work with and so they are willing to cover part of the cost to the parents, which keeps the educational loan cost extremely low, a mere 1% monthly of the outstanding balance.

By transferring the burden of collecting late payments from schools to a lender everybody wins. ASPIRE will get new clients, schools will get a guaranteed cash flow to be able to predictably budget and pay teachers, and parents will get a lower monthly payment rate (by paying tuition fees over 12 months and not just 10 months) and no longer have to go to informal lenders to pay for inscription costs.  By offering solutions to low-cost private schools’ greatest challenges, we help the sector flourish and impact more students in a more profound way.