Chicago bails out international students seeking loans

Posted by: Alison Damast on August 18, 2008

Here’s a bit of good news for international students attending the University of Chicago’s Graduate School of Business this fall. The school announced today a guaranteed loan program for international MBA and PhD students that will cover the full cost of tuition, housing and related expenses.

The new program, administered by Citibank, will replace the previous program the university had with its lending partner, the Illinois Designated Account Purchase Program (IDAPP), a not-for-profit loan agency. That program ended abruptly in July when IDAPP announced that it had failed to renew its line of credit with a private lender due to disruptions in the capital markets, the school said.

Even business school students have not been shielded from the recent tumult in the student loan market. One of the best sources of private student aid are state-based nonprofit agencies like IDAPP that help students secure low-cost private loans. Many, like the one in Illinois, have been hit hard by the credit crunch. Some have withdrawn entirely from the loan market.

To ensure that students still have access to loans, universities have had to take a more proactive role in the student loan process. For example, the University of Chicago’s Graduate School of Business is contributing funding to the new program in “order to obtain the best terms for our students,” said Rosemaria Martinelli, associate dean for student recruitment and admissions.. The new loan program’s rates and terms are more favorable to students than the previous loan program, she noted. Students can borrow up to $150,000 and have 20 years to repay. In addition, payment can be deferred until six months after graduation.

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