Many prospective students are wary of even trying to opt for MS in US as a future career option. This is mainly because funding one’s education in the US can become a major hurdle if one does not have some sort of university job which covers at least a part of the tuition and/or living expenses. Though education loans are easy to come by in India now, and also many scholarships are available - it is still pretty hard for many students to manage finances to get to the US.

I spoke with Somik Raha, a PhD student at Stanford about his efforts to help students with funding their graduate education in the US with his project named SWAYAM.

1. What are you doing right now - your course background basically?

I am doing my Ph.d. in Decision and Risk Analysis at Stanford University, and this field is the foundation for our financial offering.

2. What is the basic idea of swayam?

The premise of Swayam is that deserving students should not need to give up on an education because of financial barriers. Swayam exists to remove financial barriers in education. We empower people to invest whatever they can afford in the education of a cohort of students (whom we call Swayam Fellows). In return, the Fellows in the cohort will share a percentage of their future income for a predetermined number of years. This way, Angels are helping the students get an education and Fellows share a little of their prosperity with the Angels once they start earning. The money that comes back can be more than what is put in, and Angels can use this to help even more students. The neat thing about this is that the investors (whom we call Angels) have an incentive to take a personal interest in Swayam Fellows and will help them find mentoring, internships and jobs. The more successful the Fellow, the better the chances of getting a good return.

3. How did you come up with this?

I remember being struck by the craze for financial aid when I first came to Stanford. I thought initially that it would be nice to have a central site where students get to know about assistantships and professors find students they need. However, after being in the system for a while, I realized that there just aren’t enough assistantships for Masters students, who struggle to pay their fees, and will often take any research assistantship they can lay their hands on. Those who can’t get any assistantship will feel like losers and will remember that bad experience for a long time. This struck me as a terrible irony. Here are bright students in perhaps the best University in the world, who cannot get their minds off their financial situation and end up being miserable every day. I wrote an article about this sometime back, but I felt that was not enough.

In the meantime, I took a life-changing class by Prof. Ronald Howard titled “Designing a Free Society.” In it, he spoke of a possible solution to the funding problem. Smart entrepreneurs could write future-income contracts for financially-challenged students. I then found out that Dr. Andrew Carver, one of Ron’s Phd students, had even written a thesis on the subject. I read the thesis and spoke to Dr. Carver. He told us to go ahead and try to setup a company to do this.

Then, I connected with Thomas Seyller, another of Ron’s Phd students and my mentor (I had also joined the Phd program under Ron by now). Thomas jumped on board and did our initial modeling and we realized we could construct contracts that were good for both the student and the investor. We then started participating in various business plan competitions, and were joined by Deepti Chatti and Ashni Mohnot, who brought their own dose of healthy passion for this idea to the founding team. Our team has been working for more than a year, ironing out all the details, and we have now started a pilot to prove our idea.

4. How many people have you helped till now?

In our pilot, we will write contracts directly between Angels and Fellows without taking any percentage. We have just secured funding for our first student who is from Pakistan (admitted to Stanford’s MS&E masters program) and we are thrilled about it. We are working hard to get funding for the second student, who comes from India (admitted to Stanford’s Electric Engineering masters program).

5. If i were a student in India seeking funding, how do i approach you/swayam?

Contact pilot@swayam.org and we’ll send you a questionnaire to get more information about you. Once we understand your area of interest, we can add you to our cohort and try to raise money for you.

6. What are your long term goals?

After proving this business in the US, we want to expand to countries like India where we think we can revolutionize the education sector. You no longer need to think of education as a field for charity or public good. People already invest in stocks and we are bringing in a financial instrument that acts just like a stock - the student’s future income. We can use this instrument not just for students but also for educational institutions, who find it hard to get traditional bank loans. In fact, an admirable woman who runs a private school in Bangalore for Muslims told me how the school is profitable and yet, no bank will give her school a loan for expansion. This is very sad - if we were in India, we’d probably be funding her right now.

7. Is there a catch?

Students should not think this is free money. This is the hard-earned money of people who believe in them, and students should be grateful for the opportunity and fulfill the repayment terms to the best of their ability. We plan to have clauses in the contract that will turn the repaying Fellow into an Angel for a future cohort after a certain point, thus creating a cycle of people investing in people.

8. What help do you need right now?

The biggest help we can get is funding for our Indian student. We have very little time to arrange this. If you would like to help pledge an amount toward this, please write to us at pilot@swayam.org. You can visit our site at www.swayam.org, and we have a blog where will post our progress.