UAB Students Eligible for $300 Loans
BIRMINGHAM, Ala. (WBRC) – Car repairs, job loss or medical expenses. We’ve all been in trouble at some point and needed money fast. Now, UAB students can get $300 loans from the University of Alabama at Birmingham’s Regions Institute for Financial Education, or RIFE.
Money is available in as little as 24 hours and no interest is charged if repaid within 90 days.
“Your car breaks down on the way to school, so you miss class,” said Stephanie Yates, Ph.D., director of the institute and creator of the program. “You can’t get to work, so you miss shifts and all of a sudden you can’t pay rent. Everything adds up. We thought, “If we could find a way to help a student get this tire, it would prevent all these other things.”
Yates spoke with the Dean of the Collat School of Business, Eric Jack, Ph.D., and he suggested a source of funds: a $25,000 prize pool originally created to help students after the killer tornadoes of 2011. Yates students helped create the rules for the microloan program:
- Give the money to those who need it most,
- Maintain a reserve so that emergency needs can always be met, and
- Have the possibility of making non-emergency loans.
Priority is given to real emergencies, in particular:
- loss of income
- transportation problems
- housing problems or difficult living situations
- medical fees
“It’s very helpful for students who have a gap between the start of the semester and when their financial aid arrives,” Yates said. “By far the majority of loans are repaid within 90 days and very few students have paid interest. It’s not a trap.
The interest rate is 6%, starting on day 91. In fact, the goal is to offer an alternative to payday loans, title loans and pawnbrokers.
Members of the student-run Green & Gold Fund have written an investment policy to help the fund’s capital grow while protecting it. They also sit on the loan committee (all identifying information about other students is removed).
The goal is to “continue to have this resource for a long time to come,” said Jackie Dang, a finance major and member of the Green & Gold Fund who is RIFE’s portfolio manager. “It has been an enriching experience to know that I am part of an organization that does everything possible to help UAB students.”
Any UAB student can apply for a microcredit. Yates said, “We strive to make it as quick and painless as possible.”
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