Colombia has the third lowest higher education participation rate in Latin America: less than 70% of students finish high school only 30% of which ultimately continue on to higher education. The country’s college dropout rate is close to 47%. The alarmingly high dropout rate is not due to a lack of talented students or a lack of interest in higher education on behalf of students that hail from the lowest income brackets, but rather to insufficient slots in public education, high costs in private universities and difficulty in access to financing — high cost, limited and dependent on tangible warranties. Of the students that do attend university, 50% do not make it to graduation—oftentimes due to financial constraints. However, the higher education loan market is a space rarely tapped by either investors or donors because of the high risks involved.
Fundación Ventanas launched its self-sustainable social investment fund in 2008 to address this gap by providing students with interest-free loans for higher education (either technical school or university) based on academic merit and financial need. Unlike traditional philanthropy, the loans are a form of social investment: students do not need a co-signer and they begin to pay back their loans, interest-free, once they have entered the workforce. Fundación Ventanas operates on the firm belief that these students are only temporarily illiquid; as soon as they enter the workforce, they are able to start paying off their loans while remaining fully aware that their commitment to repay what they owe is the very essence of what warrants the sustainability of the project. The program is rooted in a relationship of solidarity/co-responsibility that constantly renews the pool of opportunities for new and existing recipients—the program’s own graduates are responsible for funding the education of future loan recipients. Over time, this is what allows the Fund to become self-sustainable.
Fundación Ventanas’ operational costs are fully covered by initial donors, new donors—both individuals and corporations. They invest in education with the additional incentive that their donation will replicate in time and represent a tax exemption.
To lower the risks inherent in providing loans to low-income students, Fundación Ventanas has incorporated various mechanisms to ensure its students can succeed in higher education and secure decent jobs after graduation. Many of these mechanisms evolved as a result of learning by doing. During its early years of operation, Fundación Ventanas took note of specific risk factors associated with students defaulting on loans and then addressed them through innovative interventions:
- A Highly Competitive Selection Process: to ensure it is investing in students who are most likely to graduate. The process starts with a web based application www.fundacionventanas.org, a preselection with emphasis on academic results and financial need, and finally a personal interview conducted by the directives of the institution with the student, or parents in cases where the student is younger than 18 years of age.
- Age Criteria: students who receive financial support from Fundación Ventanas must be between 16 and 25 years of age and not have children.
- Academic Excellency: excellent grades in both middle school and high school are required, as well as the ICFES (National Standardized Test) with a minimum of 50/100 points, and a 3.5/5.0 GPA average.
- A Clearly Defined Career Plan
- Family Support and Involvement: on the decision to attend university, cost involved and contract co-signature, although the student is the one responsible for repayment.
- Close Mentorship: Fundación Ventanas offers students continuous support; a mentor is assigned to provide guidance on academics, family or personal matters, jobs, and anything else that might affect academic performance.
- Seminars: Every semester, Fundación Ventanas organizes a series of mandatory seminars that tackle relevant life skills that are not necessarily covered in the classroom such as personal finances, job interviews, self-esteem, team work, career advice, etc.
- Job Procurement: Fundación Ventanas has developed partnerships with close to 20 companies that offer students interviews and job opportunities from the moment they enter the program to long after graduation.
- Rescue Program: Fundación Ventanas works closely with several of the country’s top universities in order to identify students in their last 2 or 3 semesters that are at risk of dropping out due to financing constraints.
- Reducing tuition costs for students: establishing alliances with five of the country’s top universities and continuously seeking new alliances.