Nearly three years after Hurricane Katrina, one of New Orleans’ most impacted and impoverished neighborhoods, the Upper Ninth Ward, has seen its first glimmer of rebirth: Reflections of Beauty hair salon opened in July in a 1,000-square-foot refurbished dental office, thanks to 14 Stanford Graduate School of Business students.

The students were part of IDEAcorps, a five-day program wherein graduate students from prestigious universities offer their wisdom to local entrepreneurs. In exchange,...

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