Student Loan Blog : MIT

Harvard Inks Custom Loan Deal to Help International Graduate Students

Student Loan Girl — Tue, 03 Mar 2009 23:47:00 GMT

At a time when large numbers of lenders exiting the student loan marketplace has made it more difficult for international students to find college and graduate school funding, Harvard has announced an exclusive agreement with JPMorgan Chase that will allow the school’s international graduate students to borrow up to the full cost of attendance without a co-signer, reports The Harvard Crimson (“Harvard Strikes Loan Deal,” March 2, 2009).

Considered the first deal of its kind for the banking giant, the new private loan agreement may make it easier for international students — who are ineligible for U.S. federal financial aid — to get the money they need for school.

The JPMorgan deal was arranged after Citibank announced it would no longer offer loans to Harvard’s international graduate students in October of last year, citing the frozen credit markets and higher loan default rates among international students compared to their American counterparts.

Citibank also cancelled similar arrangements with MIT and the University of Michigan, The Harvard Crimson reports.

Harvard’s arrangement with JPMorgan is part of the school’s pledge to maintain its current levels of graduate student aid for the next school year even at the expense of other programs, says Harvard President Drew Faust — a commitment she deems one of the university’s top priorities.

The university has also unveiled several expanded financial aid programs, including those for Harvard Law School and Harvard Medical School, as part of its renewed commitment to meeting student need.

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Citibank Suspends Student Loan Program for International Students

Student Loan Girl — Thu, 16 Oct 2008 01:04:00 GMT

Citibank announced it is canceling its private student loan program for international students in an effort to minimize its financial risk during the global financial crisis, Bloomberg reports (“Citigroup Curbs Foreign-Student Loans at Harvard, MIT, Michigan,” Oct. 15, 2008).

The lender’s CitiAssist private student loan program allowed international students at certain schools to borrow as much as $150,000 in private student loans without a cosigner; similar programs required that international borrowers have a U.S. citizen or permanent resident cosign on the loans.

Citibank informed MIT and the University of Michigan this month that it will stop making CitiAssist loans to the schools’ international students in November, just before students begin borrowing for the 2009–2010 academic year. Earlier this month, the bank also terminated its international lending program at Harvard University.

CitiAssist “did fill a very important role,” says Elizabeth Hicks, executive director of student financial services at MIT, where more than 200 of the school’s foreign students at the Sloan School of Management will have fewer borrowing options to help them meet their education costs, which total nearly $76,000.

International Student Loans Drying Up, More Banks Unwilling to Lend

In suspending its lending program to international students, Citibank joins Bank of America, one of the largest providers of student loans to foreign students, which terminated its foreign student lending program in April.

Other lenders are not likely to fill in the lending gap to international students, due, in part, to the fact that international students have a higher likelihood of default than U.S. students and because loans to “international students are not the most profitable loans,” says Mark Kantrowitz, publisher of Finaid.org, a financial aid website sponsored by Citibank’s parent company Citigroup.

Analyst Daniello Natoli, of New York-based financial firm Matrix USA, adds, “It makes sense for [Citibank] to move away from riskier products such as loans to international students, whose creditworthiness is more difficult to assess.”

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Governor Asks Pension Board, State’s Colleges to Help Keep Massachusetts Student Loan Provider Afloat

Student Loan Girl — Thu, 07 Aug 2008 20:46:00 GMT

A week after the cash-strapped Massachusetts Educational Financing Authority announced that its 40,000 borrowers would have to find a new private student loan provider, Massachusetts Gov. Deval Patrick has asked the Massachusetts pension fund to invest $50 million in the state loan agency.

Patrick’s proposal would involve the Massachusetts pension fund buying portions of a $425 million bond sale that MEFA is planning for later this month, reports The Boston Globe (“A Late Try to Salvage Student Loans,” Aug. 7, 2008).

The governor also intends to ask Boston College, Harvard, MIT, and the University of Massachusetts, among other schools in the state, to make similar investments in MEFA bonds.

“This is an idea we’re definitely going to explore,” said Robert Connolly, a UMass spokesman. “We do see it as a potential win-win in terms of providing the university with a sound investment while helping families cope with their financial aid challenges.”

But State Treasurer Timothy Cahill, chairman of the state pension board, remained noncommittal in response to the governor’s request, saying only that the board would consider the proposal.

The emergency measure, put forward to the state pension board yesterday, is meant to generate liquidity for MEFA, which left thousands of families scrambling to find a new student loan provider just weeks before fall tuition bills are due and at a time when a number of other student loan lenders, feeling squeezed by the troubled credit markets, are tightening their credit criteria for private student loans. MEFA would use proceeds from the bond sale to finance new student loans.

Although MEFA, until last week, had still been offering fixed-rate private student loans, the agency stopped offering federal student loans in April, citing the troubled economy and fallout from the subprime mortgage crisis. The nonprofit student loan authority provided more than $500 million in college loans to Massachusetts students last year.

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Governor Launches Website to Help Massachusetts Families Find Student Loans

Student Loan Girl — Thu, 07 Aug 2008 11:32:00 GMT

Massachusetts Gov. Deval Patrick has set up a financial assistance website to help the 40,000 families who were previously served by the Massachusetts Educational Financing Authority to find a new student loan provider for the 2008–09 academic year, following MEFA’s announcement on July 28 that it was suspending its private student loan program.

The news that MEFA would no longer be offering private student loans came just weeks before fall tuition payments are due and a mere three months after the state agency suspended its federal student loan program, citing the troubled economy and continuing fallout from the collapse of the subprime mortgage market. MEFA’s announcement last week marks the first time in the lender’s nearly 30-year history that it won’t be able to provide any student loans, federal or private.

The governor’s new student loans website gives borrowers an overview of student loans and the different types of student loans still available, provides links for families to compare the interest rates being offered by certain private student loan lenders, and brings together information on scholarship resources.

“It is critical for our students to be able to pay for the colleges of their choosing,” said Gov. Patrick. “I have directed my team to make available a list of resources to help students and their families locate the information they need to finance education this fall and beyond.”

Late yesterday, Gov. Patrick also made a move aimed at restoring liquidity to MEFA, asking the Massachusetts pension fund to invest $50 million in the state student loan agency by buying MEFA bonds — MEFA would use the proceeds from the bond sale to finance new student loans. The governor intends to approach Boston College, Harvard, MIT, and the University of Massachusetts, among other schools in the state, about making similar investments.

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Massachusetts Shortchanges College Students on Financial Aid

Student Loan Girl — Thu, 17 Jul 2008 23:04:00 GMT

Although Massachusetts is known as a hub for higher education, the state lags behind other states in awarding financial aid to college students, a shortfall that many educators say is limiting access to a college education for low-income and minority families, according to an article in The Boston Globe (“State Lags on Student Grants,” July 13, 2008).

For the upcoming 2008–09 academic year, Massachusetts will only award about $83 million in college grants, an amount that trails the grant budgets of comparable states. Indiana will award $331 million in grant aid to students, while South Carolina, which has about 2 million fewer residents than Massachusetts, has dedicated $273 million.

With little money awarded in state grants, Massachusetts students often need to take out student loans, particularly private student loans — which tend to be more costly than federal college loans — to cover the remainder of their college costs.

“There’s simply not enough money in the system,” said Massachusetts Senator Robert O’Leary, chairman of the Joint Committee on Higher Education. “It just hasn’t kept pace with the growth in costs and the increasing number of students who need financial aid. Every year, we’re losing ground.”

The escalating cost of tuition at public and private colleges and universities makes this funding shortage more acute. Massachusetts state grant aid covers less than 5 percent of college costs compared with the national average of 19 percent. Educators say the problem has been magnified by the state’s reliance on its deep-pocketed private colleges like Harvard and MIT to provide the bulk of financial assistance.

Low-income students who qualify for Massachusetts’ main grant program are awarded an average of $780, an amount that doesn’t even cover the total cost of textbooks, which cost students an average of $900.

Governor Deval Patrick is expected to sign a bill that would increase financial aid by $3 million.

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The New Financial Aid Landscape

Student Loan Girl — Sat, 26 Apr 2008 19:41:00 GMT

In the last few months, the media has been drawn to the potential student loan crisis, focusing on how students will be able to weather accessibility issues to get the funds they need for college next fall.

At the same time, many of the country’s top colleges and universities have been revamping their financial aid programs to better assist parents and students in covering their college costs.

Schools Modifying Financial Aid Programs

To date, about 50 schools have made substantial changes to their financial aid programs, writes Anne Marie Chaker of The Wall Street Journal (“The New Math of College Financing,” April 21, 2008).

Several schools have chosen to replace student loans with grant money that won’t need to be repaid, effectively lowering their tuition. Others have waived tuition costs altogether for families that fall below a specific income. Some have capped the amount of money a family is required to contribute toward college costs at a certain percentage of the family’s yearly income.

Student Loans Being Replaced with Grants

Undergraduates attending Stanford, Dartmouth, Harvard, M.I.T., Yale, or Cornell next fall now have a better chance of graduating with less debt from student loans, thanks to a significant shift in the financial aid programs at these schools.

Under pressure from Congress, with legislators questioning growing student debt levels and skyrocketing tuition costs that outpace inflation even as the wealthiest schools report endowments of $500 million or more, colleges and universities with sizeable endowments are tapping into those endowments to replace student loans with grants in their financial aid awards.

Although Harvard is using grant awards to eliminate student loans from its financial aid packages entirely, other schools are reserving these loan-replacement grants for families at qualifying income levels, Chaker notes.

Cornell, for example, in the 2009–10 academic year, will only replace student loans with grants for families making less than $75,000 annually. (The threshold was $60,000 for the current school year.) Students from families earning between $75,000 and $120,000 a year may still be awarded student loans, but those loans will be capped at $3,000 for 2009–10.

Tuition Waivers for Middle-Income Families

A handful of the nation’s top schools have also implemented programs that eliminate tuition charges completely for middle-income and even upper-middle-income families, with qualifying income levels as high as $100,000.

At M.I.T. and Dartmouth, families who make less than $75,000 a year will be able to send their children to college at zero tuition cost (although they may still have to cover room and board, books, and other living expenses). At Stanford, the income cutoff for a tuition waiver is $100,000 (with assets typical for that income level).

Family Contribution Capped Even for $100K+ Incomes

Last year, Harvard announced “one of the most ambitious [financial aid] plans out there,” writes Chaker, allowing families earning between $120,000 and $180,000 a year, with standard corresponding assets, to put just 10 percent of their annual income toward their child’s cost to attend — in other words, paying only between $12,000 and $18,000 of the 2008-09 sticker price of roughly $50,000.

Yale followed on Harvard’s heels with its own 10-percent policy that went even further up the income bracket, applying to families who make up to $200,000 a year.

As part of these new financial aid plans, both Yale and Harvard require that students contribute between $2,500 and $4,000 of their own funds, earned through a part-time or summer job or both, in addition to their parents’ 10-percent contribution.

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By the Numbers: Top 10 Undergraduate Business Schools

Student Loan Girl — Fri, 11 Apr 2008 18:53:00 GMT

Are you a future MBA who sees yourself building the next Trump–like empire or heading up the new 21^st-century tech giant that will finally unseat Microsoft?

If you’re planning on joining the 20 percent of college students who major in business and you’re on the hunt to find the best business school for undergrads that could give you your head start on mega-mogul success, here’s some help.

We’ve got the vitals on the 10 best from BusinessWeek’s list of the country’s Top 50 Undergrad Business Programs for 2008.

The Wharton School of the University of Pennsylvania
Philadelphia

The world’s first collegiate business school, established in 1881, and BusinessWeek’s number-one program for the third year in a row.

Previous Rank: 1
Tuition: $35,916
Full-Time Enrollment: 2,519
Undergraduate Admission Rate: 16%
School Mascot: the Quakers

McIntire School of Commerce at the University of Virginia
Charlottesville, Virginia

Previous Rank: 2
Tuition: $8,690
Full-Time Enrollment: 652
Undergraduate Admission Rate: 34%
School Mascot: the Virginia Cavaliers

Mendoza College of Business at the University of Notre Dame
South Bend, Indiana

The Mendoza College offers undergraduate degrees in accountancy, finance, marketing, and management (with your choice of management track in consulting, entrepreneurship, or information technology).

Previous Rank: 7
Tuition: $35,187
Full-Time Enrollment: 1,626
Undergraduate Admission Rate: 29%
School Mascot: the Fighting Irish

Cornell University
Ithaca, New York

Previous Rank: 10
Tuition: $19,291
Full-Time Enrollment: 708
Undergraduate Admission Rate: 37%
School Mascot: the Big Red Bears

Goizueta Business School at Emory University
Atlanta

Previous Rank: 4
Tuition: $34,336
Full-Time Enrollment: 622
Undergraduate Admission Rate: 44%
School Mascot: Dooley, the Spirit of Emory

Ross School of Business at the University of Michigan
Ann Arbor, Michigan

Combining a liberal arts and business education, the three-year Bachelor of Business Administration program allows you to apply during your freshman year of college and begin the BBA program as a sophomore. If you’re a high school senior, you may be still be able to apply for the Ross BBA program through the Preferred Admissions process.

Previous Rank: 5
Tuition: $12,585
Full-Time Enrollment: 1,069
Undergraduate Admission Rate: 49%
School Mascot: the Wolverines

Marriott School of Management at Brigham Young University
Provo, Utah

Earn your Bachelor of Science in accountancy, management, or information systems.

Previous Rank: 8
Tuition: $3,840
Full-Time Enrollment: 1,616
Undergraduate Admission Rate: 74%
School Mascot: Cosmo the Cougar

New York University Stern School of Business
New York

Previous Rank: 9
Tuition: $36,524
Full-Time Enrollment: 2,335
Undergraduate Admission Rate: 24%
School Mascot: the Bobcats

Massachusetts Institute of Technology Sloan School of Management
Cambridge, Massachusetts

Previous Rank: 6
Tuition: $34,986
Full-Time Enrollment: 246
Undergraduate Admission Rate: 12.5%
School Mascot: the Beaver

McCombs School of Business at the University of Texas at Austin
Austin, Texas

Choose a major in accounting, finance, international business, marketing, management information systems, management, supply chain management, or engineering route to business for your BBA.

According to the McCombs website, more current CEOs in the S&P 500 have graduated from McCombs than from any other public business school.

Previous Rank: 13
Tuition: $8,908
Full-Time Enrollment: 3,969
Undergraduate Admission Rate: 52% (in 2006)
School Mascot: Bevo the Longhorn

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