MBA Students Suffer as Custom Loan Programs Close

Reports continue about the problems caused by the lack of international student loans this year. Although international student loans have never been available to the general population of international students without a co-signer, a few prestigious schools had negotiated with Citibank and Sallie Mae for no-cosigner private student loan programs for their students in particular. We talked about the University of Chicago custom loan program in this blog last year.

A new article in CIO Today addresses the problems students at these schools face now that CitiAssist and Sallie Mae have terminated many of those school-sponsored custom programs. From the article:

"A number of leading business schools and graduate programs were dealt a serious blow this fall when big private lenders including CitiAssist and Sallie Mae suddenly terminated their popular "no co-signer" student loan programs. The canceled loan programs, which typically allowed applicants to obtain up to $150,000 without a co-signer to assume stewardship of the loan should the borrower default, were a financial lifeline for many international students, many of whom have no other way to finance their MBA educations. They were yet another victim of the credit crunch, which has decimated many private lenders and made those still in business more cautious than ever."

You can read the complete story on CIO Today.

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International Student Financial Aid Update - 2009

From the perspective of an international student seeking funding for an education in the US, we begin 2009 much like we ended 2008 - with worldwide financial markets in turmoil and very limited options for international education financing. A quick update as we start the new year.

For starters, both International Student Loan and Study Abroad Loans paused many of their loan programs late last year, and most programs remain paused. These market-leading programs offer loans to international students studying in the US and US students studying abroad, but because of the ongoing economic turmoil and the inability of lenders to sell their existing student loans, they cannot offer new loans at this time for most students. International Student Loan and Study Abroad Loans are working to replace and relaunch their loan programs, and we will keep you updated as that effort progresses. Visit International Student Loan and click the Apply Now button to submit your information to be contacted as soon as a loan program is available for you.

Private student loans in general have been difficult to obtain. Almost all programs, even for US students, now require a co-signer and excellent credit for both parties, and require "school certification." In fact, there do not appear to be any direct-to-consumer, non-school certified private student loans available to anyone. These loans - ones that did not need to be certified by your school, and therefore could process very quickly and let you borrow more than the total amount that your school permits - were very popular with international and US students. But because of perceived abuse, it is an open question as to whether such DTC (direct to consumer) student loans will come back at all.

For international students, the basics of sound education financing become even more important. Those basics haven't changed:

1. Be very realistic about your budgeting and financial needs, and choosing a college that is within your budget. Visit these two posts to see more on being realistic about your choice of college and setting an accurate school budget.

2. Consider a community college for the first two years of your education. Visit this post to learn how international students save money at community colleges.

3. Get as much in scholarships as you can. Start with your school, your government, and look online on sites like International Scholarships and International Education Financial Aid.

4. If you need loans, continue to check with International Student Loan, Study Abroad Loans and your school, which may have other lenders available.

Best of luck as we begin 2009. From an international education financing perspective, let's hope we have a much better year than last!

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International Student Enrollment in the USA Soars

Open Doors Report 2008 released today by the Institute of International Education

After several years of modest rises and even post-9/11 declines this decade, the number of international students studying in the USA soared this past year, to a record total of 623,805, a 7% increase over the previous year's enrollment of 582,984. The 7% increase is the largest year over year increase since the 1969-1970 school year, and will be widely celebrated as the result of greater emphasis on attracting international students by the US State Department and US institutes of higher education.

The Open Doors Report is compiled by the Institute of International Education, and released annually during International Education Week, which kicks off today. This year's report shows strong growth from the top three sending countries, as the number of students in the US from India (94,563), China (81,127) and South Korea (69,124) increased 12.8%, 19.8% and 10.8%, respectively. In addition, Saudi Arabia moved to #9 on the list with a tremendous increase of 25.2% to a total of 9,873, as King Abdullah's extremely generous scholarship program reached maturity.

The Open Doors press release from this morning quoted Allan E. Goodman, President and CEO of the Institute of International Education, “The steady increase in the number of international students in the United States reflects actions taken by the U.S. government and many individual colleges and universities to ensure that international students know they are welcome here, and that we appreciate how they contribute to the intellectual and cultural environment on campus and in the wider community. Furthering academic exchange – in both directions – is one of the best investments that we can make to strengthen U.S. higher education and research activities and foster cross-border collaboration on shared global problems such as fighting disease, protecting the environment, and countering terrorism.”

The University of Southern California maintained its top position as the school with the most international students at 7,189, followed by New York University with 6,404 and Columbia University with 6,297. US students studying abroad also showed a sharp increase of 8.2%, from 223,534 in 2205/6 to 241,791 in 2006/7.

Click here to read the Open Doors press release from IIE.

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New Rules for International Students - British Home Office

New Rules for International Students - British Home Office
(from the UK Visa Bureau)

Last week, the British Home Office announced the new Australian-style points-based system for international students in the UK, known as Tier 4 under Home Office rules.

Under the new system for UK student visas, all universities and colleges wanting to educate nationals from outside the European Economic Area (EEA) will need a licence to do so.

As of March next year, only those licensed universities and colleges will be able to sponsor overseas non-EEA students to study in the UK.

Further, before studying at a UK licensed educational facility, foreign students will have to supply fingerprints and meet new criteria to be allowed to study in the UK.

The new system involves a 'sponsor management system', which includes a technology system that allows licensed sponsors to inform the UK Border Agency if students do not attend a required amount of classes.

Immigration Minister Phil Woolas said, "International students contribute £2.5bn to the UK economy in tuition fees alone. The student tier of the points system means Britain can continue to recruit good students from outside Europe.

"Those who come to Britain must play by the rules and benefit the country. This new route for students will ensure we know exactly who is coming here to study and stamp out bogus colleges which facilitate the lawbreakers."

Click here to read the full release from the UK Visa Bureau.

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3rd Annual InternationalStudent.com $3000 Travel Video Contest

Its that time of year again -- everyone's back in school, and InternationalStudent.com has launched its 3rd Annual Travel Video Contest! Time to start thinking about what you would do and where you would go with a fat wad of cash. The entry deadline is October 31 and the grand prize has been increased this year to $3,000. The winners will be announced in early November, and the finalists will be available for all to see on InternationalStudent.com.

Never mind the money - past winners now have worldwide fame among international students from their videos and blogs! In addition to the cash prize, the winner gets to blog on InternationalStudent.com for the duration of their trip or study abroad - providing a huge platform and millions of visitors to impress.

To enter, you must submit a video no longer than 5 minutes that describes the trip you would take if you win, and why you should win. The best entry will win the $3,000 grand prize. Humor is good, great footage helps, artistry and story-telling matter - you can tell from the past winners, which you can see on InternationalStudent.com. So be funny, or include some great footage and music, or tell a great story -- something to get your entry noticed and stand out from the crowd.

Film students, technical and artistic types -- you may have a leg up on the competition. But the contest is open to anyone 18 or older and studying outside their home country, or planning a trip to study abroad. And past winners include a guy going for his MBA - not exactly what you think of as an artistic pursuit - so anyone can win!

For more information and to enter, go to:
http://www.InternationalStudent.com/contest/

University of Chicago Business School Provides Loan For its International Students

We've been talking about the turmoil in the student loan market, and how this turmoil will impact international students in particular. In this difficult student loan environment, one US school has really stepped up to provide a solution for its international students. Yesterday, the University of Chicago Graduate School of Business announced in a press release that they have launched a guaranteed loan program for international students that covers the full cost of tuition, housing and related expenses. All international students in the M.B.A. and Ph.D. programs qualify for the loan program and no U.S. cosigner is required.

An excerpt directly from the press release on PR Web:

"Administered by Citibank, the Chicago GSB International Loan Program is available to returning students as well as new students entering the school in September. The new program replaces one that ended abruptly in July when the Illinois Designated Account Purchase Program (IDAPP) failed to renew its line of credit due to disruptions in the capital markets.

"In order to obtain the best terms for our students, the school is contributing funding to the new program," said Rosemaria Martinelli, associate dean for student recruitment and admissions. "Compared with the previous loan program, the new rates and terms are more favorable to students."

The school is committed to ensuring that all students, regardless of citizenship, have access to funds by the start of classes on September 25, 2008, Martinelli said. An online application will be used to simplify the process for applying for a loan.

"Students will be able to borrow up to $150,000 and have 20 years to repay. Payments can be deferred to begin six months after graduation. The University's arrangement with Citibank is for one year. Beginning next year we expect to offer our international students a choice of several loan programs from multiple lenders," Martinelli said.

The University of Chicago Graduate School of Business is one of the leading business schools in the world. The school's faculty includes many renowned scholars and its graduates include many business leaders across the United States and worldwide. The Chicago Approach to Management Education is distinguished by how it leverages fundamental knowledge, its rigor, and its practical application to business challenges."

Its great to see a US school taking the financing needs of its international students seriously enough to ensure a loan program available to all. Of course, its easier to put together a program like this when you are a premier business and graduate school like the University of Chicago. However, as loans get tougher and tougher for international students to get, more schools could look to this model.

International student loans are still available from International Student Loan. However, credit criteria and interest rates have gone up, and all borrowers need a US co-signer. Click here for more information.

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Sweden to Charge Non-EU Students

Almost two years ago on this blog, we talked about the debate in Sweden about whether to charge tuition to international students. Higher education in Sweden is free, but of course Swedes pay extraordinarily high taxes for high level services like free education. International students in Sweden so far have enjoyed the same free education as citizens -- but unfortunately it looks like that is changing.

According to higher education minister Lars Leijonborg, no later than January 1, 2010, international students will have to pay tuition, unless they come from an EU country, Iceland, Liechtenstein and Norway.

From the Local online, Sweden's News in English: “Our primary argument is that it is unwise of a country not to benefit from a payment system which obviously exists. Why should these students pay money to American or British universities, but not to Swedish [ones]?” Leijonborg explained to the Svenska Dagbladet newspaper.

The proposal includes stipends for students that cannot afford to pay the tuition. How those stipends would be implemented and how it would impact students from developing countries is yet to be determined.

The argument in favor of charging tuition to international students is understandable, as in general they don't pay taxes into the Swedish system and most other country alternatives would require tuition payments. However, the simple fact that Sweden ignored this relatively minor revenue opportunity, and was gracious with its international student population, set it apart from the rest of the world of international education. While other countries have been criticized for viewing international students as a cash cow (for instance, in the UK international students typically pay much higher tuition than domestic students; in Australia universities have been criticized for enrolling students without sufficient English, arguably after the fees; and in the US international students are not eligible for subsidized federal loans like US students), Sweden has been the shining city on the hill, helping to attract the best and the brightest to its universities. As worldwide competition for international students continues to heat up, Sweden will likely lose a substantial portion of its international student population when it enacts this plan; there's no doubt that it will lose some of its glimmer in the eyes of students from developing countries.

Click here to read the article in the Local.

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