The Higher Education Finance Fund (HEFF) is a for-profit company that is running a pilot project in Central and South America. Initially funded with $34 million, the project aims to develop practices and protocols for funding higher education through microfinance companies. The pilot program is running in Guatemala, Honduras, Bolivia, Peru, Paraguay, and the Dominican Republic.
While there are some scholarship and public funding initiatives throughout Central and South America, not all students who would like to participate in higher education have the resources. Social constraints on higher education keep many girls out of school. For families in rural areas, sending a youth to school means sending them away from home, into the city. The family loses the income generating potential of the member, as well as needing to provide financial support while at school. In addition, higher education many times means these students will permanently leave rural areas for employment opportunities in cities or abroad.
There are public universities with free tuition for international students in Panama and Brazil. But immigration issues, transportation costs, living expenses, language, and cultural differences means these opportunities are probably lost to the majority of students seeking higher education in Central and South America.
In other parts of the world, cultural and religious constraints also put up significant barriers to higher education, especially for women and girls. Can technology and the infrastructure and local knowledge built by microfinance institutions make the leap into financing higher education?
If cultural and social norms support the value of higher education, then the infrastructure that is already in place can be adapted to these longer-term loans. The possibility of initial financing of an education loan by a parent, which is then taken over by the student after graduation, allows some flexibility in the longer-term nature of education loans. In addition, there is room for collaborative work through various NGOs and government agencies to provide some assistance and support for students who are able to take out MFI loans. Education specific support, such as a health ministry offering support for nursing and medical students, is one collaborative approach.
While technology can provide some distance-education opportunities, much of the growth that comes with higher education is rooted in the experiences that come from leaving home and going off to school, living in a new place and meeting new people. The nature of living and learning with a new group of colleagues, those who will become professional allies and friends, amplifies the experience of learning in a university or school setting.
MFIs can adapt their existing practices and protocols to the longer-term nature of education loans, perhaps with some collaborative work with local government and NGOs. The benefits to family, communities, and individuals, not to mention the gains in human potential for the world, means we should all be focused on allowing opportunities for higher education to everyone who can benefit from those opportunities.
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