This is the first im hearing about a blockchain project for merit-based access to higher education. I think its a fascinating idea. I wonder if the trend for overpriced education will continue in the coming decades though. Especially with more and more remote/online options. We are seeing this at a K-12 level with free programs like Khan Academy. Wonder if it will eventually move towards higher institutions in non-specialized fields.
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@WillWorkForCrypto Sadly, the American educational system is more about credentials than about knowledge acquired. Tuition costs have been ballooning faster than general inflation and even faster than health care.
I believe that MOOC will bring some significant change in the future of education, but MOOCs will not replace the primary purpose of education. It will be more evolutionary, as employers decide what types of credentials are meaningful, and third parties find ways to package MOOC results, through formalized testing.
This is one primary reason why we decided to take not just academic certificates in consideration, but even your MOOC certificates will add value to generate a better SPQ score.
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Just had a look at your MVP. Very nice! Good luck to you guys. This looks like a big project and something like this will certainly be a reality at some point. With a bit of luck, it could be you guys.
Please help me understand what exactly you are doing, I have a few questions.
- First, why have you’re own token and not just use XEM? Don’t you think we have enough tokens? haha. But seriously, you say you will use XEM and your own token, under what circumstances would you use each?
- As a crowdsourced lending platform, how do you intend to get the lending capital and considering they are student loans and to be repaid often over a lifetime, how can you maintain a stream of funds to keep giving out loans that won’t be repaid for many years? Will you become a registered financial institution? If not, how do you intend to navigate regulations?
- What does the blockchain do in your system apart from handle payments? How does it improve on just having a website/app that verifies official notarizations of documents and a job market?
You guys are starting what seems like a huge project. It seems to me that the most appealing (and most difficult legally) part of the project is the decentralized loans and scholarships. I would have liked to see more implementation of this on your milestones since it is your main selling point, really all you say on this is in Phase 3, part 3, “Explore CSR funds and scholarships”. What I see going to market after the initial development is a job hunting app and notarization service. Would that be accurate?
I think that this last point is very important to clear up because your title says “decentralized platform for educational loans and scholarships”, then your milestones barely touch on these ideas. Please explain.
Hi @corporal_clegg Thank you for the kind words. Answering all your questions below:-
1 - Yes. there are a lot of tokens and I do agree with your point 
But we require RNZ (Sernez tokens) for providing incentives for the students. We are also laying the foundation for a global scholarship program, which will be operated jointly by a Sernez and the community all over the globe. The total supply will be limited to 4Billion RNZ tokens out of which 25 percent is allocated for the global scholarship fund. At first, we want to try our NEM based tokens before we start accepting BTC or any other form of funds via the platform.
2 - We are targeting postgraduate students. We have decided not to get into the undergraduate program due to the level of risk associated with repayment. Sernez will design a legal model to offer borderless loans in a competitive way. So far we have identified four different funding sources.
a. Alumni and University Funding - Alumni from top universities invest in specific bonds for their school or regions and receive a competitive return to support a pool of students. (The university that we are working, have their own scholarship funds which are distributed within the college.)
b. Retail investors - As of now, the Sernez platform is open only to accredited investors.
c. Family offices and impact investors - These investors typically invest a minimum of $1 million in several bonds supporting students. These investments have a social impact focus, and some investors have developed scholarship programmes using the return generated by their investments.
d. Private banking - Issuing “education bonds” with banks. These bonds were sold to High Net Worth Individuals by banks to grow our sources of funding for students further.
We are doing a PLUS loan model and traditional education loan model. In PLUS loans, you start the repayment from the next month you receive the loan whereas the other one you start the repayment six months after completing graduation. With 3-5 year loan terms, any measurement of returns during the first year is thus a bit subjective. Payments on the Notes depend entirely on payments Sernez receives on corresponding Borrower Loans. If a borrower fails to make any payments on the corresponding Borrower Loan related to a Note, payments on such Note will be correspondingly reduced.
3 - Handling payments itself is a huge a task for Sernez. Peer to Peer platform like SOFI handles more than $1B in transaction. Apart from transactions and notarization, Sernez is using blockchain technology to bring authenticity to the student profile. Platforms like LinkedIn has failed to prove the identity and authenticity of a profile. You can update your LinkedIn page overnight and there is no way that an employer can find out if the profile is real or not. We are focusing on these areas.
Perhaps you missed this “Identify and run a proof of concept of Sernez payment system at a university.” This is a part of the third milestone.
We are based in India where P2P lending is still not regulated. Hence we would like to stay away from the lending part in India. We are slowly building our base in the US and we will implement the lending module in one state for a couple of students in 2019. Our milestones will make an impact on 3500+ students in India. We are not claiming that after three milestones we will be ready to provide loans or compete with platform like Prosper or SOFI. We might have to raise a substantial amount of money from institutional investors to move forward which we believe that is only possible after we build a stable version of our platform.
Thank you for your questions again I hope I have answered all your questions.
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@Hello all,
Please read the exciting news about Sernez here:-
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Great project! definitely got my attention! What are the proposed steps once the gov., students, agencies (edu institutions) enter the smart scholarship on the blockchain? By the way, the government is something that is difficukt to deal with. I do appreciate your concept though. What is your market strategy to get governments and private / public edu inst. on board with the concept and start validating the loan and student success on the blockchain?
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Hi, @gregory_fermont Thank you for the comment. Record verification is a big issue for India, and currently, we are piloting our notarization portal in affiliated government colleges (http://lamina.sernez.io/). This is an area where we see a tremendous necessity for both government and the private sector. We are aiming to implement the notarization portal in the certificate issuance department so that eventually we can avoid the dependency on the university to vet the documents of the students.
I do agree with your statement. Working with government is extremely difficult and require a lot of patience and perseverance. One of our co-founders is dedicatedly working in this area full time.
We recently signed MoU with an affiliated institution, and we aim to run blockchain based scholarships in the college. We believe that once we successfully run the platform in one college, we will scale up and look at lending/borrowing opportunities.
Thank You
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Thanks for you response, so if I understood correctly students spend the bought crypto on courses and services provided by private agencies. Agencies can reimburse their courses worth by converting the crypto to its apt. value in fiat currency, which is pre-decided by the government.
Will the agencies provide digitally verifiable completion certificates to students once they complete the course?
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@gregory_fermont We don’t operate in that way. We are only focusing on lending and scholarship part. Kindly go through our process flow if you have any doubt.
Thank You
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thanks bugslayer, some students loans are subject to some course completion criterias. `somehow I thought that this would also be incorporated inside the smart contract process. thanks for your reply.
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@gregory_fermont Not really. Managing a financing startup is difficult and requires a license to operate from the reserve bank. To add on anything over the existing model will be difficult because that might take the entire focus of our team. I hope you understand.
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absolutely! nevertheless ambitious project with great potential! good luck to you guys!
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Hey, finally had a chance to look into this. Sounds like a grand plan! Good luck.
Some questions as I’m unclear on the peer-to-peer loan component and how the crypto/fiat onramp/offramp will work on the platform - specifically in regards to cryptocurrency volatilities. So say I’m an investor, I’ll need to aquire crypto to fund students, right? So say the student has put in an application for 20k USD and I want to fund 1% of this, I’ll buy $200 worth of RNZ tokens with BTC (Say 200 RNZ tokens for simplicity) and fund the student. Correct? So, in this scenario:
- I’ll start getting returns on my investment only when the student finishes their studies and get a job, correct? Am I right that it could easily be 5+ years? How long is the repayment term?
- What happens if value of RNZ token changes by the time the student needs to pay fees? Say, drops by 10%?
- In what currency is the loan value stored in? If the student is expected to repay 20k RNZ, and this token rises 1000%, the student will be screwed.
- Does the student have to re-apply each term?
- As an investor, I feel the proposition doesn’t add up once crypto is added to the equation. Yes, I’m seeking higher returns on my fiat investments, but putting fiat into crypto is already way higher risk than the risk of the loan repayment.
Sincere apologies. I thought I replied to your comment but looks like I missed it.
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Our lenders are not individuals with money. Our lenders are Accredited investors who can invest for a long time in a good investment vehicle. The term period is 7 - 20 years.
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We are currently not accepting tokens for investments or repayment. But let’s say if we do this tomorrow, the student has to pay what’s he is paying every month no matter the value goes up or down. The value is calculated against USD/EUR.
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The student doesn’t have to re-apply each term.
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Do not consider this as a typical crypto investment. If we accept tokens tomorrow, we might have to regulate our tokens under the US Securities Act Regulation for future tokens use cases. At present, we do not have adequate information about this.
Thank you for the question.
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With your response number two it is still the same problem though isn’t it? If the student is borrowing in usd/eur but has to repay from wages in rupiah and the rupiah drops they could end up having to repay much much more than if their loan was taken and repaid in rupiah. this happens a lot in loans to developing countries.
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Dude… please read our whitepaper for more info. The volatility of Rupees or Rupiah is not in our hand.
Current scenario - If a student from India applied for a loan in June 2018 for $85,000 for his masters, he/ she would have to loan INR 57,80,000 (Fifty-Seven Lakh Eight Hundred Indian Rupees) form the local bank.
Historically, the Indian Rupee reached an all-time high of 74.33 in October of 2018. $85,000 in October would be 63,18,050 (Sixty Three Lakh Eighteen Thousand Fifty Indian Rupees). That means a student who secured loan in June will have to pay the difference of 5,38,050 (Five Lakh Thirty-Eight Thousand Fifty Indian Rupees), i.e., $7328 + the interest on the disbursed amount in INR which will change according to the exchange rates.
Peerfin helps students to avoid the FX risks involved when availing loans. Our loans are in GBP, USD, and EUR in phase 1. Since the loan disbursements are processed in the university accepted currency, the student is saving at least $3000 - $10,000 of FX risk.
There are many other advantages for our student if he is borrowing via Peerfin. Check this out.
You have described the problem but not the solution. Thanks for that but the whitepaper actually doesn’t describe the solution either.
“Peerfin helps students to avoid the FX risks involved when availing loans. Our loans are in GBP, USD, and EUR in phase 1. Since the loan disbursements are processed in the university accepted currency, the student is saving at least $3000 - $10,000 of FX risk.”
Why not make the loans only in Rupiah? Problem solved.