Education Pays – Quick Stats

by sanjaya on August 16, 2011

in Vittana

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A recent blog post by the Wall Street Journal revealed that over the past two years, Americans (individuals, not the government) have reduced their debt in every category except one, student loans. During the current economic recession, student debt increased by 25%. This is largely due to the fact that the cost of education in America continues to rise. Median wages for college grads has only increased 70% since 1991, while tuition costs have increased 300% (from, say, $16,000 annually to nearly $50,000!). Despite this, students are still willing to do whatever it takes to get a college degree for one simple reason, it pays off.

A study released by Georgetown university shows that the lifetime earnings of a college graduate was 84% higher than that of a high school graduate. This gap has increased from 75% in 1999 and 40% three decades ago. The same study shows that income rises substantially “even in many fields where a degree is not crucial.” For example, the median salary of a dishwasher with a college degree is 83% higher than that of a high school graduate. Those that are lucky to continue their education beyond a bachelor’s degree see even higher median incomes:

Another study released by the Hamilton Project shows that despite the high cost of education, investing in an associate degree or a bachelor’s degree has a much higher rate of return than that of many other investments:

“By any financial measure, the investment in a college degree is the winning choice, with a rate of return of a whopping 15.2% a year on the $102,000 investment for those who earn the average salary for college graduates. This is more than double the average rate of return in the stock market during the last 60 years (6.8%), and more than five times the return to investments in corporate bonds (2.9%), gold (2.3%) long-term government bonds (2.2%) or housing (0.4%).”

Though both of these studies are based on American students, we’re seeing the same situation all across the globe. The students we talk to know that the only thing that is preventing them from securing that higher paying job is that they lack a diploma or the necessary certification:

Unlike those of us in America, these students do not have access to students loans. Most banks are unwilling to lend to students who lack the collateral necessary to qualify for their loans. However, with the help of our lenders, Vittana is working to change that.

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Video: graduates tell their stories

by jfoster on August 12, 2011 · 1 comment

in fellows, students, Vittana

Here is a short compilation of graduates telling how Vittana loans changed their lives.

[youtube]http://www.youtube.com/watch?v=M63TTSbeocg[/youtube]

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What Does Education Mean to You?

by Kushal Chakrabarti on August 11, 2011

in Vittana

A few weeks ago, I mentioned a new campaign we were getting ready to launch.

I’m really excited to publicly unveil our new campaign today, “What Does Education Mean to You?” Education is so personal, as it means something different to each of us. At the same time, it’s so universal — it means something to every one of us.

[vimeo width="400" height="225"]http://vimeo.com/25861712[/vimeo]

What does education mean for Vittana students? They say: “Opportunity.” “Oportunidades.” “Opportunité.” Tomorrow, our friends at Hulu will premiere our 30-second campaign PSA about what education means to people, young and old, rich and poor, American or African.

I believe in education. You believe in education. Help us convince the rest of the world. For the last 50 years, education has been about literacy, numeracy. For the next 50 years, education needs to be about connecting people to opportunity.

Already, 7,000+ people from 50 countries have signed up. Tim Ferriss (Author, 4-Hour Workweek), Vivek Kundra (CIO, United States of America), Tim O’Reilly (CEO, O’Reilly Media), Marissa Mayer (VP, Google), Satya Nadella (President, Microsoft) and dozens of other leaders in technology and business are helping promote it. NPR just published an article on What Does Education Mean To You? earlier this week.

We want to break 10,000 people by next week. Can you help us achieve this?

Three things you can do:

  • Only have 30 seconds? Watch our 30-sec PSA on global education.
  • Have 30 + 7 seconds? Watch the PSA on global education and tell the world what education has meant to you in your life.
  • Have a full minute? Watch the PSA, tell the world what education has meant to you, and share this page with 5 of your closest friends from school.

Education has meant something to all of us. Let’s pass it on.

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Quotation of the Week: Ability vs. Opportunity

by Lindsey Maxfield on August 11, 2011

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“Ability is of little account without opportunity.”

-Lucille Ball

This week marked Lucille Ball’s birthday. Were she still alive, she would now be 100. I can still vividly remember watching re-runs of ‘I Love Lucy’ with my grandparents growing up, and I can’t help but laugh every time I think of that famous conveyor belt scene. As a result, this quote has always struck me. Lucille Ball was one of the ablest comediennes of her time (and, I would argue, since). She had to work hard to gain the recognition and fame she did, but much of that was due to doors opening (opportunities) as she moved up. So what would have happened if she never had the opportunity to break into her chosen career and be successful?

For us in the Vittana offices and for our students, the word ‘opportunity’ is synonymous with education.
While there can be many paths to success, many of them remain closed if you can’t afford to finish your schooling. So students are stuck. The chance to take out a student loan can change that by providing the opportunity to advance, achieve, and show those abilities.

I am no comedienne, and never will be. But I am glad to have the example of Lucille Ball to show that it’s possible to take advantage of opportunity and be successful, and I’m doubly glad that Vittana provides that kind of special opportunity to our students. Vittana students are incredibly talented – they just need a forum to prove it. I can’t wait to see what successes they have in the coming years. I have a feeling it’s going to be fantastic.

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Photos: Nicaragua, land of lakes and volcanoes

by jfoster on August 10, 2011 · 1 comment

in fellows

A collection of photos from my time outside of the office in Nicaragua.

The shadow of folk hero and guerilla leader Augusto Sandino looms over Managua and the Nicaraguan consciousness. Beside him are the Christmas lights common throughout Managua that stay lit all year-round.

An ice-cream vendor peddles past the wreckage of Managua's historic cathedral, ruined in the earthquake of 1972.

The clock on the historic cathedral is frozen forever at the hour of the earthquake, about half an hour after midnight, Dec. 23, 1972.

Nicaraguan President Daniel Ortega joins fellow revolutionaries Che Guevara and Augusto Sandino in a display of keychains for sale.

Teenagers hang out by Lake Managua.

Horse-drawn carts mix with cars on Managua's main street.

A woman sells Nicaraguan snow-cones or raspados while a carriage passes Granada's cathedral.

Enjoying a baseball game in Granada. Nicaraguans take the national sport seriously.

A security guard in Granada sheepishly asks to have his picture taken.

One of the nation's thousands of stray dogs takes an adventure through Granada.

Volcano Masaya emits sulfurous gas.

Volcano Concepción with its perfect cone, rises out of Lake Nicaragua.

A howler monkey on the island of Ometepe.

The tropical climate produces forests full of flowers.

A woman poses for a picture in San Juan del Sur.

Rural Nicaragua.

A bus attendant's friends joke about the size of his muscles.

Near AFODENIC's office in Juigalpa, cattle drives in the highway are a common sight.

Co-workers Humberto and Marcela enjoy a tortilla with cheese and cream. I also tried pinolillo, a drink made of ground-corn and chocolate.

Fishermen in Casares head out for a full night of fishing.

Fishermen weigh their catch of barracuda in Casares.

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One Hand Is Not Enough to Clap

by Nick Cain on August 9, 2011 · 3 comments

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Last month South Sudan celebrated its independence. After a 22-year civil war, it became the world’s newest country (and supplanted Eritrea as Africa’s youngest nation). Independence Day happened to coincide with my visit to Rwanda, a neighboring-but-not-bordering East African nation that is home to Urwego Opportunity Bank, one of Vittana’s newest partners. In hotels, offices, and restaurants around Kigali, televisions and radios were tuned in to the Independence Day ceremonies and the related commentary. All week, newspaper headlines heralded the arrival of new opportunity for the people of South Sudan. That weekend, as I transferred through Nairobi’s airport on my way to Ghana, I noticed a long line of people boarding a flight to Juba, South Sudan’s capital city. I scanned their faces, curious whether they were as intrigued as I was by the unique experience that awaited them just a couple hours later: walking off a plane and into a two-day-old nation.

While the nation may be new, the struggles of its people are not. For many South Sudanese, especially the generation too young to remember life before civil war, an existence punctuated by war, kidnapping and disconnection from family was commonplace.

All the more inspiring then that from such a generation rose Nura Koleji, Pamela Daniel and Natalina Kiden, three students at Juba’s technical college whom I read about in The Guardian while I was on the road. The young women are on a powerful, unlikely journey to become their country’s first female auto mechanics. “My mechanic’s overalls will make me a role model for other women,” Nura told reporter Laura Powell. Why? Because “one hand is not enough to clap…we need both sexes, not just one.” I’ll give you a moment to absorb the elegance of those two sentences. I’d wait for you to stop smiling, too, but if you’re like I was when I read them, that won’t be for another hour or so.

20-year-old Nura’s graceful aphorism sums up what all equality-minded, productivity-oriented societies and economies must embrace. No society will be truly rich and no economy truly dynamic unless it protects and promotes equal, open, and active participation by women.

And that equality must begin with education. As participants in Vittana’s “What Does Education Mean to You?” campaign have reminded us over and over this week, education opens doors, creates opportunity, and, in the words of my colleague Todd, “amplifies the unique talents and interests of every student.” That’s what I found so compelling and, for lack of a better word, cool about Nura’s story. Her interest is cars. So she decided to learn how to fix them, no matter the amount of teasing her overalls invite. It’s as simple as that.

Almost. Because Nura is a woman, she is burdened by responsibilities her male peers will likely never have. As Powell describes, by the time Nura arrives at school each day she

“has collected water from a borehole, swept her family’s compound, poured tea for her six younger siblings, revised, and picked mangoes before her two-hour walk to school. After classes finish at 3pm, she will sell the fruit at Juba market and put the earnings towards her £41-a-year school fees.”

We must do more to even the playing field. It may take two hands to clap, but it takes two free and fully unencumbered hands to enthusiastically applaud.

*Title Photo Credit: Laura Powell, The Guardian

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A final barrier to graduation

by jfoster on August 8, 2011 · 1 comment

in fellows, students, Vittana

For me, it was never really a question of whether or not I could go to college. Sure, money has always been tight in the Foster household and finding a way to pay for college for their four sons was never easy for my parents, but it wasn’t optional either. If we wanted to go to college, we would find a way. Whether through scholarships, student loans, or our own savings, I am fortunate I grew up in a country where a financial support system exists for young people wanting to go to college.

The problem isn’t necessarily the cost of classes, attending college can be surprisingly cheap in Nicaragua. The schools most Vittana students attend vary in cost from about $30 to $120 a month. However, working full-time to earn an average of $240 a month, like many of our students do, this makes up a significant cost. Yet the majority of our students have been able to scrape by and pay these costs, usually without any assistance from their families.

The real killer comes when it’s time to graduate. After 4 or 5 years of studying, getting good grades, and working hard to pay for it, university students in Nicaragua face one final wall that many are unable to scale. After all their studies are done, students typically have to pay about $1,000 USD to receive their diploma. This fee is called a Seminario de Titulacion and is universal in Nicaraguan schools.

Because of these daunting costs, most college students do not graduate. According to data from the National University Council in Nicaragua, less than one-third of students enrolled in university actually graduate.

Nora Karina Avilez is one of the students who beat the odds, although she used to fall into the majority of students who didn’t. She made it through the challenges of five years of college, defending a thesis in psychology, two practicums, walking to school while pregnant, and holding down a full-time job to pay for it. The challenge she couldn’t overcome on her own was paying her final graduation fees. After finishing all her coursework, she languished in a job outside her field of study for two years. This woman’s dreams and her ability to take care of her daughter were put on hold because of $200.

With a $200 loan Nora Karina Avilez was able to pay her final graduation costs, receive her degree and find a better job.

For Nora and other students in Nicaragua, there aren’t many options for financing their education. They could borrow money from a bank but the chances of being approved for a loan are very low. Even if approved, interest rates are typically about 40-50%, turning a formidable cost into an unimaginable cost. In contrast, our partner’s rates are 10% a year.

With a low interest-rate loan, Nora was finally able to pay for her degree in psychology in the summer of 2010. Degree in hand, within three months she was able to get a job with Latin Top Jobs as an assistant in human resources. She has lots of friends who are in the same position she was — they went all the way through school but couldn’t afford the final graduation costs. And she’s not the only one of our students that has friends like that.

Nora explained that those without their diplomas are mostly working in low-paying or temporary jobs outside their field of study, like she was. She explained the crux of the problem — employers don’t care what knowledge you have in your head, she said. They want to see the piece of paper in your hand. Without a loan, she would have remained in that same situation for years.

“Education has guaranteed a future,” she said, “not just for me, but also for my daughter.”

Help other Nicaraguan students like Nora scale this one final wall by lending here.

Watch this video to hear Nora’s story in her own words.

[youtube]http://www.youtube.com/watch?v=bvw48hK2CbU[/youtube]

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Quotation of the Week – The Ideal of the Individual

by Todd Gehman on August 4, 2011 · 3 comments

in Vittana

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“Education should bring to light the ideal of the individual.”
- J.P Richter

I used to write software for a “life goals” website. One of the company’s objectives was to leverage the convenience of technology and the peer pressure potential of social networking to help people determine their real aspirations and then act upon them. The side effect, we felt, was that our users would live their best lives, effectively creating better versions of themselves. The theory goes like this: if you were actually doing all the things in which you passionately and publicly claimed interest, you would effectively amplify yourself, becoming more you in the process. It’s a pretty great trick.

Education is a means of doing the same thing with your intellect. In a way, education is the means by which we set and achieve life goals for our brains. In the broad sense (spreading one’s curiosity into various aspects of the world) and in the more focused sense (mastering specific skills and bodies of knowledge), education expands the dynamic range of a person’s intelligence. It amplifies the unique talents and interests of every student. In the quotation I picked for this weeks feature, Richter very effectively pins this down as the central goal of education itself.

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Fomenting a revolution with AFODENIC

by jfoster on August 3, 2011 · 1 comment

in fellows, Vittana, Vittana Partners

I am stationed at an ideal place to measure the impact of Vittana loans on students and their families. AFODENIC in Nicaragua is one of Vittana’s most established partners, having worked together since 2009. More than 100 students have graduated college because of Vittana loans through AFODENIC. I’ll tell you more about that impact in a later post. For now, let me tell you about some of the interesting changes our partner is bringing to Nicaragua beyond their groundbreaking work with student loans.

Student loan promoter Marjorie Gonzalez talks with students at the University of Commercial Sciences in Managua.

AFODENIC has an interesting, although long, name that translates as the Association for Fomenting the Development of Nicaragua. “Foment” isn’t a word we use much, except for describing a revolution maybe. But I kind of like the word, and maybe we are actually fomenting a revolution of sorts – a revolution of education and opportunity. Yet somehow I don’t think that’s what all the graffiti around town reading “¡Viva la Revolución!” is referring to.

Although AFODENIC currently actively serves about 250 Vittana students, this still makes up a small portion of their total number of clients. All in all, they have about 5,000 active borrowers. The scope of AFODENIC transcends traditional microcredit into community development projects such as solar panels, water purification systems and affordable housing. In fact, about half of their $8,000,000 portfolio is dedicated to building or homes in low income neighborhoods.

Lawyer Ileana Vega explains the legal aspects of the loan before disbursing loans to clients.

This year, AFODENIC expanded their services further by offering insurance policies to people who wouldn’t otherwise have access. If a member of a family dies, it’s an emotional blow that may also spell financial ruin for a family. Insurance can help soften that blow.

All of these services fit under the umbrella of providing access to financial services for a majority of the population who wouldn’t otherwise have that access.

Clients make payments on their loans.

This extensive approach started with a project from a Spanish NGO, Peace and the Third World, working those in need outside the city of Juigalpa. This initial project resulted in a microcredit initiative for farmers, which led to the founding of AFODENIC in 1999.

The current director, Francisco Montoya, was one of the founders. He’s a warm man, with an air of quiet competence that completely breaks down when asked about financial services for the underserved. He explains that although much of AFODENIC’s work is now in the capital city of Managua, where I’m currently based, there is still a strong emphasis on support for farmers and rural citizens. Montoya explains that this work is important not only because there are so many struggling farmers in Nicaragua that lack basic access to financial services, but also for the simple reason that much of Nicaragua’s food comes from these small farms. If farmers have credit to buy high yield seeds and fertilizer or other more productive practices, they can produce more plentiful crops at a lower cost per unit. This translates to better incomes for farmers and affordable, fresh food, benefiting all of Nicaragua’s consumers.

Employees Gonzalez and Leonarda Hildalgo leave the office after a day of work.

Out of this broad slate of projects, education plays an integral part in Montoya’s and AFODENIC’s vision for the future.

“Our vision is to be an instrument, a platform for funding the projects that will develop Nicaragua,” he says, “Education is part of that.”

For one, a lack of education limits personal potential. But as part of a vision for a better Nicaragua, the lack of access to education means something broader to Montoya. Limited access to education means a limit on the potential of the country as a whole. Together Vittana and AFODENIC are fomenting a revolution to make that access limitless.

¡Viva la Revolución! indeed.

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World: 1, Absolute Poverty: 0

by Lindsey Maxfield on August 3, 2011 · 1 comment

in Vittana

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In anything, there are good days and bad. Reading about current world events like famine, shootings and plane crashes can get depressing quickly – and that’s just this week’s news cycle.

However, those lows can make the good-news highs that much better. And it turns out today might just be one of those days. I read an interesting article this morning by Charles Kenny, a fellow at the Center for Global Development, claiming that the number of people living in absolute poverty (<$1.25/day) is on the decline.

What? Talk about fantastic news. Kenny cites a few studies to back up his statement, but to check his statement, I pulled some quick data from the World Bank. Lo and behold, he’s right:

For developing countries only. Source: data.worldbank.org

Every single region’s percentage in absolute poverty has gone down in the last decade and a half while the overall population size has risen (the most recent data is from 2005).

Maybe this is old news; maybe I was so focused on our work here at Vittana that I missed the announcement. And there are always many factors at play in changing those numbers. But, to look at the whole picture for a minute – WOW. Call it economic resurgence, call it international development, call it pigs flying for all I care. We hear a lot about failures in the world, but today we’re a success – something’s working!

I have to admit I’m not excited about this for purely altruistic reasons. Less people in absolute poverty means more people living in those next steps up in development where Vittana thrives. As more people step above the $1.25 line, the world opens up. If you have a full belly and a roof over your head, you are free to think about other things – like the opportunity for an even greater life – that education can provide. And it doesn’t have to be much above that line – Vittana students in Vietnam estimate they’ll go from $3/day to $8/day after graduation.

It’s easy to get swept up in the 24-hour news cycle, making molehills into mountains and living in a state of constant crisis. And I do not intend to belittle the very real poverty issues facing the world – even if the number of people living in absolute poverty is dropping, one person living on so little is a tragedy, let alone almost a billion.

But this is still a good excuse to celebrate. For today at least, World: 1, Poverty: 0.

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