She’s the unassuming friend credited with sparking MacKenzie Scott’s $19bn giveaway. Now her secrets risk blowing up the saintly image of former Mrs Bezos

Since she divorced Amazon founder Jeff Bezos, MacKenzie Scott has forged a reputation as an almost saintly figure – thanks to a string of enormous philanthropic donations.

But now that image is in danger of being tarnished by criticism levelled at a loan company in which she’s an investor… and which is run by her old college room-mate.

The revelations concern Jeannie Tarkenton, head of a student-loan firm that critics say leaves some young borrowers drowning in debt.

The decades-old bond between the two women was forged when Tarkenton handed Scott $1,000 to stop her having to drop out of Princeton University.

Since then, Scott – now thought to be worth more than $40 billion, has always credited her friend with helping shape her worldview, recalling the ‘college roommate who… loaned me a thousand dollars… to keep me from having to drop out.’

Now, Tarkenton has spoken out to the Daily Mail to defend the practices at her student loan company, Funding U, which appear to be starkly at odds with the warm, nostalgic anecdotes about the ‘class of ’92’ room-mates in central New Jersey.

The Mail can reveal that Funding U, while pitching itself as a lifeline for bright students with little credit history, charges Annual Percentage Rates (APRs) as high as 13.5 percent. 

For a struggling graduate, that can be crushing.

A $10,000 loan could mean paying back another $8,000 in interest over a decade – far more than on a standard federal loan at roughly 7 percent.

Critics say the math tells a very different story from the company’s feel-good branding.

Borrowers have flooded message boards with complaints about chaotic paperwork, sudden cancellations of loans, and customer-service black holes.

‘Stay away,’ one Reddit user warned. Another poster in the thread about Funding U was even starker: private loans ‘have ruined people’s lives’.

Others noted that no-co-signer loans inevitably push APRs higher. As one borrower put it: ‘Their loan limits are low and they do have pretty high APRs.’

At least one student described stomach-churning anxiety as they waited for a disbursement that never arrived.

‘I’m so scared I’m gonna get kicked out of classes,’ one wrote. Another said Funding U wired fall tuition, then cut them off in spring with no explanation.

The Daily Mail could not independently verify the comments, though CEO Tarkenton told us they represented ‘welcome feedback.’

‘We are a relatively small company. We like to put all of our resources into making our loan prices lower and being efficient, so we’re a relatively small staff, but we appreciate the feedback,’ she said.

The for-profit company insists it is justified in charging higher rates because it serves a high-risk population.

‘These students have no credit history,’ said Tarkenton told the Mail. ‘They’re often first-generation or low-income students who are blocked from traditional loans.’

Higher rates, she said, reflect the elevated credit risk, and that Funding is competitive compared to others, who charge as much as 18 percent.

Certainly, not all those who have used the company are critical. Testimonials on the site praise Funding U as a lifeline amid bank rejections, calling it an ‘excellent option’ with ‘no surprise fees.’

Still, the contrast between Scott’s famed philanthropy – ironically enough she has given away $700 million to colleges and universities this year alone – and the harsh realities faced by indebted young borrowers has raised uncomfortable questions about the financial ties binding the former room-mates.

It was after founding Funding U in 2015 that Tarkenton recruited Scott as an investor.

It is not known what stake Scott holds, though Tarkenton told the Mail that Scott bought into a $14m equity round in 2020, and still holds that equity – giving her a direct stake in the business now drawing online complaints.

Some may now feel that connection sits awkwardly with Scott’s campaign to remake American giving based on trust and humility, and the emphasis she places on ‘the intention behind the act’ of giving money.

The controversy comes at a time when huge numbers of students are confronting soaring tuition and steep repayment schedules. Shockingly, total student debt in the US has hit $1.8 trillion, with 43 million borrowers owing money.

Scott and her funding juggernaut Yield Giving – which has donated $19 billion since 2019 – did not respond to requests for comment. But those who see a discord between that generosity and her links to Funding U may find themselves asking: Can philanthropy built on kindness co-exist with a business built on debt?