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Virgin Money launches Student Payback

06/04/2008
Innovation
Virgin Money, has launched Student Payback, a new financial service that organizes intra-family loans. Indeed, parents can borrow from their most affordable sources of capital such as retirement funds and expects that students repay a part of the loan. The terms are spelled out in an agreement stipulating whether students pay them back for all or a portion of that debt. Student Payback lays out a clear repayment schedule and provides formal documentation and automation. The aim is to give students access to an affordable funding source, flexible repayment terms, and a course in financial responsibility.
Perspective
Student Payback shows that with college costs rising in the United States, Americans need new ways to borrow money. The growth of social networking with solutions such as Prosper or Finanz provides more opportunities. However, Virgin Money innovates by working with families and students to make an agreement. It permits students a step forward since they accept their financial responsibility from the beginning of the process. According to experts, Student Payback allows Virgin Money to better target the P2P student loan market. It could operate a graduation from formalizing existing loan agreements, to brokering multi-party financing deals. It means that initial money could be borrowed from parents with help from government programs. Then, when the student progresses through his studies, additional financing could come from Virgin Money partner bank(s) and/or organizations.
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