What if paying for college didn’t require years of debt or endless paperwork, but instead, could happen through blockchain? That’s no longer just a futuristic idea. Pencil Finance has officially launched the first-ever student loans funded entirely on-chain, and it’s already making waves across the world.
A New Chapter in Education and DeFi
In a world where decentralized finance is often associated with NFTs or speculative tokens, Pencil Finance is doing something radically different — and refreshingly human. It’s using blockchain to fund real students, at real universities, with real tuition needs.
The platform recently deployed a $1 million loan bundle, raised entirely on the blockchain via EDU Chain, with backing from heavyweights like Animoca Brands, Open Campus, and NewCampus. The money is now being used to provide education loans in places where access to financing has traditionally been difficult.
Where the Money Goes (and How It Helps)
The loan capital is already at work.
- ErudiFi, an education financing company, is using the funds to support students across the Philippines and Indonesia. These students can now attend university or online programs without upfront costs, thanks to a blockchain-powered system that pays schools directly and collects repayments in manageable monthly chunks.
- Meanwhile, Transcend Network is using part of the loan capital to support edtech founders in over 60 countries through its global fellowship program.
This isn’t just about numbers. It’s about enabling real lives — students who might otherwise miss out on education can now get the support they need, powered by a transparent, decentralized system.
How It Works
Pencil Finance’s model is built around a dual-tranche lending system:
- The Senior Tranche offers a fixed 15% annual return.
- The Junior Tranche has variable returns and takes on first-loss risk for those willing to bet on higher upside.
Investors choose their risk level, contribute capital, and that capital is deployed to real-world student loan providers like ErudiFi. Once students begin repaying their loans, the funds (plus interest) flow back to the investors. Everything is handled on-chain, with full transparency and auditability.
It’s a win-win. Students gain access to funding. Investors earn real returns, not from volatile speculation, but from something as tangible and meaningful as education.
Why This Matters
Yat Siu, co-founder and executive chairman of Animoca Brands, said: “Today marks a historic turning point for both blockchain and education. Pencil Finance has introduced a new real-world asset class where eligible users can earn yield that is generated from educational loan repayments. By issuing student loans with funds that originated on-chain for the first time, Pencil Finance demonstrates how decentralized technology can directly empower learners and transform access to education worldwide. This is an example of how blockchain can make a real, positive difference in people’s lives.”
Frank Li, co-founder of Pencil Finance, said: “This milestone is more than just a technical achievement – it’s proof that blockchain can drive meaningful social impact. For the first time, students across emerging markets can benefit from transparent, efficient funding powered by on-chain finance. We’re proud to help open doors for the next generation of talent.”
Cameron Wang, co-founder and COO of HackQuest, said: “Using on-chain capital to issue student loans is history in the making. We are witnessing blockchain technology providing practical, life-changing solutions for students and families. This is just the beginning of our journey to tokenize the student loans market and increase access to education.”
The Bigger Vision
With this pilot already live, Pencil Finance is setting its sights on scaling the model globally. The goal? To tokenize the student loan market, make education more accessible, and allow anyone to contribute to someone’s future — and benefit in the process.
In a world full of buzzwords and empty promises, this is blockchain doing what it was meant to do: creating access, driving equity, and changing lives.