Zero-interest loan program available for low-income engineering students at UH Mānoa

A new, zero interest, no fee loan program will be available to low-income students enrolled in the College of Engineering at the University of Hawaiʻi at Mānoa beginning in fall 2024.

The initiative aims to help students with proven need while also meeting the state’s workforce demand for engineers. The program is a pilot of the Hawaiʻi Renewable Learning Fund launched by Social Finance.

The national nonprofit and registered investment adviser plans to expand to other degree and certificate programs with a record of strong employment outcomes, local employer relationships and experience serving diverse students.

“Many talented students in Hawaiʻi face barriers to degree completion, including limited affordable student financing options and high costs of living,” said Hydie Kim Hudson, vice president, Impact Investments at Social Finance. “The Hawaiʻi Renewable Learning Fund aims to address these barriers while also helping local employers hire talent for in-demand roles. We’re excited to leverage our experience designing recycling funds across the country to meet the needs of Hawaiʻi’s students and employers.”

The UH College of Engineering has partnered with Social Finance along with the Harold K.L. Castle Foundation and other local philanthropic organizations that have contributed $2 million to start the fund. The loans are mainly intended to cover the remaining costs of a student’s education not covered by grants and scholarships.

“Many of our students have to work part-time jobs to make ends meet, so they take one less class each semester, which delays graduation and the start of a career,” said College of Engineering Dean Brennon Morioka. “The longer they take, the more expensive it is and the less likely it is that they will earn a degree, and meanwhile, our college is graduating about 300 engineers a year when the state needs around 500 new engineers a year.”

After graduation and securing a job, if a student who participated in the program earns more than $50,000 a year, they will repay their zero interest loans back, or the firm that hired them may offer to pay it back as part of the job offer.

Local engineering firms like Bowers + Kubota, Hawaiian Dredging and SSFM International are the first to formally partner with the fund by committing to offer a student loan repayment assistance benefit for program participants they hire and retain. All loan repayments, whether from individuals or employers, go back into the fund to support future students. If a graduate is hired for less than $50,000 a year, they are eligible for an income-based deferment during which their monthly payment amount would be zero.

“This should increase the number of engineering students that we graduate each year while also providing local engineering firms with additional incentives to attract our graduates,” Morioka said. “This will be a game changer for so many of our students with demonstrated need, and it will have a positive ripple effect across our industry and ultimately the state.”

Morioka credited the Castle Foundation for championing the effort for the last two years and for making a generous contribution to start the fund. The Castle Foundation exists to invest in the future of Hawaiʻi, according to Alex Harris, the Castle Foundation vice president of programs.

“With this fund, we hope to give young people the help they need to complete a degree and secure a good job,” Harris said. “We also hope to offer local engineering firms a new tool to recruit and retain the College of Engineering’s talented graduates. By recycling every dollar repaid back into the fund, we’re able to continuously support more students than we could using traditional loan or scholarship models.”

Harris and Morioka noted that the fund would not have been possible without the support of the local engineering firms, like SSFM International.

“This forward-thinking project not only aligns with our ongoing commitment to nurture local talent and foster sustainable economic growth in Hawaiʻi but also marks a significant step toward creating a resilient and skilled workforce for Hawaiʻi’s future,” said Michael P. Matsumoto, president/CEO of SSFM International, Inc. “We are proud to be part of this transformative endeavor that lowers barriers to education and empowers our future engineers. This isn’t merely an investment in individual students — it’s a strategic investment in Hawaiʻi‘s sustainable future.”

Social Finance was selected to design and manage the Renewable Learning Fund because of its experience creating similar outcomes-based workforce partnerships that focus on student success. The College of Engineering was selected for the pilot phase because of its record of working closely with local industry employers to offer students internships, career exploration days, targeted networking workshops and mentorship programs to ensure students have the best chances at securing jobs upon graduation.