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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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.
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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