A $1,000 loan between college roommates has come full circle in a story of friendship and fortune that spans decades and billions of dollars.
When MacKenzie Scott was on the verge of dropping out of Princeton University during her sophomore year, her roommate Jeannie Tarkenton stepped in with a crucial loan that kept Scott in school. Now, with Scott sitting on a $34 billion fortune following her divorce from Amazon founder Jeff Bezos, she’s using her wealth to support Tarkenton’s mission to help students facing similar financial gaps.
“I would have given MacKenzie my left kidney,” Tarkenton told the Associated Press. “Like, that’s just what you do for friends.”
From Personal Loan to Philanthropic Investment
The story begins in the dorms of Princeton, where Tarkenton found her father to loan $1,000 to Scott, who couldn’t continue her education without the funds. That single act of kindness has clearly stuck with Scott, who has mentioned it as one of the personal kindnesses she’s considered while donating more than $19 billion since her 2019 divorce.
Today, Tarkenton is the founder of Funding U, a lending company with a unique approach to student loans. Unlike traditional lenders, Funding U provides last-gap, merit-based loans to low-income college students without requiring co-signers — often a major barrier for students from disadvantaged backgrounds.
How does the company determine who gets loans? By looking beyond traditional credit scores. The company uses an algorithm that evaluates transcripts and internship experiences to predict which students are most likely to graduate, secure employment, and repay their loans.
A Philanthropic-Investment Hybrid
Scott’s involvement with Funding U represents a fascinating evolution of her giving strategy. Rather than simply donating money, she’s providing what financial experts call “junior debt” — essentially absorbing more risk to encourage larger investments from traditional banks.
Scott supplies about 30 cents for every dollar that Funding U loans, accepting concessionary rates that mean less profit and longer repayment periods than market standards would dictate. This philanthropic cushion has helped Tarkenton secure the remaining 70% of funding from banks like Goldman Sachs, who participate partly to comply with federal regulations aimed at reducing financial discrimination.
“What MacKenzie Scott is doing is helping nonprofits develop their capacities and work on those topics that they really think they should be working on, and not just what the wealthy philanthropists or leadership of large foundations think they should be working on,” philanthropy researcher Pamala Wiepking explained to Princeton Alumni Weekly.
This isn’t charity, though. Tarkenton is quick to emphasize that Funding U is a business, and Scott will eventually recoup her investment — much as Scott repaid that crucial $1,000 loan decades ago.
A Strategic Approach to Giving
Since embarking on her philanthropic journey, Scott has created Lost Horse, a limited liability company to manage her giving in a strategic manner. Her approach has been characterized by “no strings attached” grants focused on equity, higher education, and economic security.
Scott’s wealth primarily stems from her Amazon shares — she received roughly a 4% stake in the company (approximately 139 million shares) in her divorce settlement. Since 2020, she has reduced that stake by 42% as she’s converted corporate wealth into philanthropic impact.
The relationship between Scott and Tarkenton demonstrates how personal connections can shape even the largest philanthropic efforts. Their story suggests that behind Scott’s billions and headline-making donations lies a fundamental understanding of what it means to need help at a critical moment — and the difference that timely support can make.
In the end, perhaps the most remarkable aspect of this billion-dollar friendship isn’t the money at all, but how a simple act of kindness between college roommates has evolved into a framework for helping thousands of students who find themselves in the same position Scott once did — talented, determined, but just $1,000 short of their dreams.
