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International student loans yanked CUs step in
NEW YORK (1/26/09)--A loan program that many international students depended on to finance their education in the U.S. has been pulled, with business schools scrambling to fill the void. So far only two schools have found replacement lenders--and both are credit unions, reports BusinessWeek.com (Jan. 23). The CitiAssist and Sallie Mae programs typically allowed international applicants studying in the U.S. to obtain up to $150,000 without a U.S. co-signer. The programs were pulled because of the credit crisis, leaving not only students in the lurch, but also business schools and graduate programs trying to attract top students. Among those who haven't found lenders yet, although some are in negotiations, are the Harvard Business School, the Wharton School, University of Michigan's Ross School of Business, the Chicago Booth School of Business, Columbia Business School and others. Credit unions are filling the void at two schools. One is a new program, the other is a continuation of a long-running program. MIT's Sloan School of Management announced its replacement lender will be MIT FCU, located in Cambridge, Mass., and Stanford Business School has run a similar program with Stanford FCU, Palo Alto, Calif., for decades. MIT FCU signed an agreement with the Sloan school in December. MIT FCU's program was developed with Credit Union Student Choice, a credit-union-owned organization that offers turnkey, school-certified, private student lending solutions to credit unions across the nation. The agreement doesn't require students to have a domestic co-signer, offers a competitive interest rate and allows students to take out a line of credit with the $235 million asset credit union. It also features zero origination or pre-payment fees, low interest rates, and can provide financing for the full cost of attendance. MIT Sloan Director of Student Financial Aid Daniel Barkowitz told BusinessWeek.com that the most attractive aspect of the loan is that students don't have to reapply for the loan program every academic year. "While we may not have the brand name or asset size of mega bank lenders, we have a business model that makes us perfectly suited to meet the private loan needs of MIT students," said Brian Ducharme, MIT FCU's president/CEO, in a press release (PRNewswire Jan. 23). "We've always maintained a singular focus on serving our community with cost-effective products and services. This clarity of purpose has allowed us to grow and thrive at a time when many publicly traded lenders are struggling for mere survival," Ducharme added. Stanford FCU's program will continue to be available to international students without a U.S. co-signer, said Jack Edwards, director of financial aid at Stanford University. For the full story, use the link.
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