Batten Institute

Miguel Palacios



Bio: Miguel Palacios is co-founder of Lumni, a company that finances higher education students through innovative financial mechanisms, currently operating in Chile. The company raises private funds to finance higher education students, offering investors a return based on students’ future income. Lumni is the result of his interest in exploring possibilities for innovating in the financing of higher education. Related to this interest is the consulting work he has done for the World Bank on alternatives for financing lifelong learning and the policy analysis paper “Equity-like instruments for financing higher education” published by the Cato Institute.

He attended the Universidad de Los Andes in Bogotá, Colombia, where he received his B.S. in Mechanical Engineering in 1997. He received his M.B.A. from the Darden School of Business in 2001. While at Darden, he received the Michael William Shermet Award and the Faculty Award for Academic Excellence. He is currently pursuing a doctoral degree in Finance from the University of California at Berkeley.

Expertise: Human Capital Contracts  


Fellowship Focus: Under the guidance of Faculty Host, Patricia Werhane, the focus of this Fellowship was to research the theoretical basis, both financial and ethical, for an alternative way to fund education through private investments—Human Capital Contracts (HCC), i.e., contracts in which students receive financing in exchange of a percentage of their income. In doing so, Mr. Palacios performed research on the relationship between these instruments and other financing alternatives for higher education, developed financial models for valuing them, and discussed his ideas with several leaders in higher education financing throughout the world.

The major output of this Fellowship is the book titled, Investing in Human Capital: A Capital Markets Approach to Student Funding (Cambridge University Press, 2004). The book includes a description of HCCs, a comparative analysis between different alternatives for funding higher education; evaluation models for HCCs and other derivative instruments that could be created from them; ethical implications of implementing HCCs, and implementation mechanisms for developing countries. HCCs present an alternative that acknowledges the economic value of education, offer risk-adjusted returns for private investors in educational funding, fulfill financial needs of students regardless of their background, and do not rely on or increase public debt. For these reasons, HCCs can have an impact in student financing around the world. Palacios will target audiences in the financial community, multilateral organizations, and policy advisors in countries that have implemented different higher education financing schemes, such as Australia, U.K., and Chile to promote this new alternative.

Contact Info


Appointment: 2001-2003

Publications & News


Investing in Human Capital: A Capital Markets Approach to Student Funding (Cambridge University Press, 2004).  

top of page