Amid concerns of high student loan rates and a trillion-dollar national student debt, an organization has teamed up with alumni from 78 different schools to develop a different model for funding student loans.

Started by a group of Stanford University business school students last fall, Social Finance Inc. — often shortened as “SoFi” — aims to provide students with loans funded by university alumni at lower interest rates than unsubsidized ones provided by the government.

The program works by allowing alumni of a particular university to invest in a loan funding pool specifically available for students at that university. The program was introduced to UC Berkeley this fall.

“By creating a community where everyone is vested in one another’s success, both students and alumni benefit,” said Arti Doshi, manager of campus development at SoFi, in an email.

Developed “to address the failing student loan market,” SoFi is tackling students’ financial troubles by lowering loan rates, providing financial education to borrowers and connecting students and alumni, Doshi said in the email. Students can only borrow from the funding pool available for their school.

“This means that the money you borrow is coming from a UCB alumni,” Doshi said in the email. “We believe the single greatest value proposition SoFi brings to the table is the student-alumni connection.”

SoFi currently offers MBA graduate student loans at an average interest rate of around 6.49 percent — lower than those of federal Unsubsidized Direct Loans and Parent PLUS loans — for UC Berkeley borrowers, according to the organization’s website. Undergraduate students can place their names on a waiting list until undergraduate loans are available.

The organization has funded more than 100 loans to UC student.

These lower interest rates could offer a helping hand to students on campus struggling financially. Debt collection for federal student loans reached $12 billion in the last fiscal year alone, The New York Times reports.

Although only about 1 to 3 percent of students on campus are not eligible for federal loans, the average amount of debt for graduating seniors in 2011 was $17,116, according to campus Associate Director of Financial Aid Roberta Johnson.

“We of course want to get the best possible loans for our students,” Johnson said. “It would be interesting to look if there are any benefits of this private program. A lot of things beyond interest rates need to be looked at to make a good comparison.”

Doshi said that a lack of financial literacy is the largest problem behind growing student debt.

“You shouldn’t be taking out $100,000 in debt and going into a $30,000 a year job – it just won’t work,” she said in the email. “We’re going to help students ‘know before you owe.’”

Though undergraduate need-based subsidized federal direct loans gather no interest while a student is in school, unsubsidized federal direct loans accrue interest rates even while a student is enrolled, according to the U.S. Department of Education.

These interest rates have proven troublesome for some students on campus.

“It’s ridiculous; it’s not financial aid,” said senior Hayg Astourian, who said his parents are being forced to take out a federal PLUS Loan at a 7.9 percent interest rate.

Although Astourian is typically against private loan-lending companies, he said SoFi’s lower interest rates appeal to him.

“If we are going to privatize, then it’s better to have more competitors,” he said.