Thinking about graduation debt is scary, but one company is trying a new way to address it. | Source: ShutterStock

Going to college is super important. You gain valuable knowledge, develop important relationships and it opens many opportunities. That doesn’t mean that there aren’t some stressful parts of the college experience – figuring out your major, thinking about loans, looking for jobs after graduation. Yeah, it can be a lot to process.

I’ve been there, and as a grad student, I am still there. It can be tough and confusing, and you sometimes find yourself wondering if you are going to college for the “right” reasons or “right” degree. It’s kind of sad and scary to do this, considering expanding your education is a positive thing.

That’s why I was super intrigued by this start-up called Pave that I read about in USA Today. Basically, young professionals get paired up with someone who invests a chunk of money in them upfront. They can use this money to pay off their loans or to help launch a dream project. The trade-off? The “prospect” who receives the money owes their “backer” a percentage of their income for the next ten years.

Unlike your usual loans, there aren’t interest rates or anything like that. Pave has deemed it a “social financial agreement.” But what does that exactly mean? Well, it’s not just about the money, but a plan to also foster a personal connection. The more successful the prospect is, in turn the better it works out for the investor. Backers can choose a prospect from a group of profiles who has goals or interests similar to their own, which gives an extra push for them to help their mentee with professional opportunities.

I feel like I know a lot of extremely talented people who have had to put their dream job on the backburner for a while. The job market is tough and with student loans to pay off, they just aren’t in a financial position to really follow on their ideal career path. I wouldn’t wish that on anyone, but as it stands now, it most certainly happens. Right now only a selection of applicants are picked to make a full profile, but the Pave CEO said the hope is to have a network built that allows anyone interested to be a potential prospect.

The financial aspect sounds amazing, but I think the mentorship really seals the deal. If they can hook you up with a job, that’s solid, but as a young professional it’s also great to just know that someone else has been there. The USA Today piece even said that investors seem more drawn to that aspect rather than whatever possible financial benefit there could be. That willingness to just want to help people is a really refreshing thing when it seems I am always hearing the words “competitive job market.”

Even though there isn’t an obligation on the part of the prospect to make a certain amount of money, I think I would personally be hesitant to sign up because I would still feel pressure to do well financially to pay back my investor. That’s just kind of my personality style, but I guess if investors just want to see young people succeed, I would need to let go of that numbers mentality and just focus on living my dream job to the fullest.

Since this is all pretty new, I want to keep my eyes on it and see what happens. It sounds like there’s a lot of logistics, though they’ve apparently come up with a solid team to figure out how the whole payment system works. I’m not economist by any stretch, but I think trying new ways of dealing with student loan debt is something that could really be beneficial.

If the way the system is now isn’t working for everyone, maybe a fresh way to approach paying for college and how to deal with post-grad life is what we need. Everyone should have the chance to pursue their dreams regardless of their financial status. Could this be the system that helps make it happen? Time will tell, but until then, I’m keeping an eye on Pave.

Do you think a system like this would work? Do you think more companies will try something like this in the future? Tell us in the comments!

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