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.
Innovative funding scheme in which students only begin paying back their loans once employed; cost-saving strategies such as relying on volunteers as mentors; and supplementary financial support for students who cannot afford to pay for meals etc.
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CEI approaches in actionFinancingStudent/household loansStudent support21st century skills (soft skills)
Model details2008Not-for-profit21st century skills (soft skills)ActiveLong-term projectLoans to students or familiesLumniAlianza EducativaInstitución Universitaria Politécnico Gran Colombiano15752%48%
Fundación Ventanas has a close relationship with Alianza Educativa, which manages five concessionary schools in Bógota (public schools run by private providers which target the city’s most marginalized children). Alianza Educativa helps distribute materials about the loans to their students.
Scale157 students funded, with an average of 124 applications and 26 acceptances per year
As of Spring 2014, 157 students have been funded, with an average of 124 applications and 26 acceptances per year.
14 students are supported by Fundación Ventanas’ “rescue program,” through which the foundation works with 4 partner universities to identify students in their last 2 or 3 semesters who are at risk of dropping out due to financing constraints.June, 2014
Since Fundación Ventanas opts to remain self-sustainable (with loan repayments financing the new loans it gives out), it does not plan to grow significantly in the short term.
- Within the next 15 years, Fundación Ventanas plans to finance 408 university students and to increase the number of students supported to 15 per semester, while remaining self-sustainable through close and continuous student follow-up. The model has been designed to incorporate a definite number of students in a determined period of time with a closed amount of investment that warrants its sustainability in the long run.
- Replicability of the model: The model is based on quality in the student’s selection process, and follow-up and accompaniment until he/she incorporates the work force. Procedures have been standardized in order to actively seek to replicate the self-sustainable social investment fund model aiming to achieve the multiplying effect in other families or enterprises interested in exercising their social responsibility in the higher education field.
Monitoring & EvaluationYes
Fundación Ventanas monitors its students’ academic performance in university or technical school. As a precondition of the loan, every student is required to submit his or her academic transcript with grades and GPA every semester. To retain funding, students must receive at least a 3.5 GPA (on a five point scale). Fundación Ventanas also monitors dropout rates, workshop attendance, repayment of loans, and job procurement after graduation. During the application process, Fundación Ventanas evaluates students on ICFES standardized test scores (the Colombian university entrance exam), secondary school grades, vocational clarity, and motivation.Standardized assessment performanceGraduation or promotion ratesEmployment ratesStudent retentionNo
Standardized Assessment Performance - Other | 59 active students have a GPA of 3.8 or above (out of a 5 point scale) at their universities.
95% of loan recipients graduate from college, only 5% drop out.
29% of students have graduated.
40% of students attend each Fundación Ventanas seminar on average
- 33% of students begin repaying loans before graduation.
- 5% of students were dismissed due to bad grades, but then 90% of them were able to improve their grades over the following semester and were therefore reinstated.
- 7% attrition rate (in Colombia the average attrition rate is 48%).
- 44% of students are repaying their loans, half of them started to pay prior to graduation.
- 9% of students have paid their loan back in full.
- 8% are late in their repayments.
- 65% of students are the first person in their family to have ever entered higher education.