what's your human capital?

[julie anne]

What if your LSAT score, undergraduate grades, college and major - besides determining what schools you get into - also influence whether private loan companies give you money for law school?

While it's not at the stage to be used for law school loans just yet, People Capital's ultimate goal is to do just that for undergraduate students using its Human Capital Calculator.

You plug in your high school, high school grades, undergraduate school, undergraduate grades, major and whether you plan to go to graduate school into a calculator, and it spits out your projected earnings potential over the 10 years after graduation.

The calculator is still in beta, but the company's goal is to ultimately provide a tool that lenders can use to determine the credit risk of applicants.

According to the math of the calculator, if you went to a froufrou prep school, aced your AP classes, attended an Ivy League for undergrad and plan on going to law school, chances are you'll be raking in the cash after graduation, will be able to pay back whatever is loaned, and will consequently be a better candidate for a big loan.

If you went to public school all your life, went to a state school for college, plan on working right after graduation and don't have any plans to sell your soul in the future, you may not be so lucky.

Here's the reasoning of the company in its own words:

"When you apply for a private student loan, lenders want to assess the risk they would take by making the loan to you, so they can know what amount they should lend and at what interest rates. Lenders use a set of standardized and verifiable attributes as a means of differentiating among student borrowers.

The most common form of credit score is the 'FICO score'. FICO scores are based upon such attributes as the number of credit cards you have, outstanding balances, payment history and bankruptcy. Based on this form of methodology, students (or young adults in general) will fare poorly, as they do not have a long (or even medium) positive history of payments. As a result, they will generally receive low FICO scores and, thus, will look like very risky propositions. This is where the Human Capital Score comes in.

The starting premise for the Human Capital Score is that there is a way to assess the relative riskiness of students by looking in part at a different set of standardized and verifiable attributes. These attributes help predict their future income, and hence their ability to pay back loans. These relevant attributes are items such as school, major, GPA, and standardized test score. The Human Capital Score uses these as inputs to create a score."

Check it out here.