Why would you start a student loans company? How would you start one, and what is the most important ingredients needed to create such a business that would serve its purpose and at the same time be a profitable business? We asked these questions of a former vice president of an American broker of student loans, and this is what he had to say.
Our interviewee had been in the student loan business for over seven years. He began as a business systems designer and had the privilege of designing an entire student loans company from scratch. The president of the company was a former president of a prestigious Washington D.C. university who had found the most significant problem facing the bright students at his university was the problem of obtaining the funds necessary for attending schools of higher education. The president was concerned that his students might obtain enough in loans to pay tuition and material costs, such as books, computers, and other necessities, but their loans did not provide enough to pay for food, shelter, clothing, electricity and the other costs we must pay whether a student or not. He had found that nearly every student loans company he came in contact with was generally willing to lend for education costs, but disregarded these other living expenses. The profit from such loans is not very great. That was not the reason this man wanted to help. These were the people who would be America's future. Catering only to the well-to-do would ignore the wealth of inventiveness that the lower classes surely possessed. To help help them met educational and living expenses, this university president started his own student loans company.
Having some contacts throughout the financial communities in and around New York and Washington D.C., this university president set his staff of economists the project of coming up with a program he could sell as a profitable investment to larger bankers throughout the world. By his prestige alone, he was able to secure a half a billion dollar as a line of credit from a major Japanese bank and several hundred thousand more from American and European banks. He had the money, now he needed the company.
With money in waiting, he next sought and found one of the best business and financial system designers available, our Vice President of Information Systems. At the time, this person was sole consultant to American Mensa in Brooklyn, a sure genius from the start. The president understood that the student loans company he was starting had to be one based on the best information technology available, and that meant the best computer hardware and software. Software for student loans was scare at that time, but with this superstar systems man, he was sure to get the infrastructure he would need to keep costs low and obtain comprehensive functionality for the business.
During the six months this software designer created a fully integrated student loan system, the president put together a brilliant staff of businessmen and women, although a small staff. He used available state sponsored workers and university interns where possible. Within a year's time, his student loans company was providing the necessary funds to send many American children to schools of higher education, getting the education they might not have gotten without the help of these caring and entrepreneurial people. Thanks to all those who are willing to settle for a small profit, but bestow a big prize on the hopeful youth of our nation, there are many families today contributing to our American way of life, and hopefully helping others achieve their dreams.