Posted by: Alison Damast on February 11, 2009
International business school applicants fretting about how they are going to pay for business school can finally rest easy. BusinessWeek has learned that a leading international bank, which did not want its name disclosed, has agreed to create a new pilot $500 million lending program for international students at 40 business schools in the U.S. and Europe.
The new deal with the yet-to-be-named bank came about after a number of financial aid administrators reached out this fall to the Graduate Management Admissions Council (GMAC), an international association of business schools and sponsor of the GMAT, asking for help in securing new lenders for their international students.
“They came to us saying, ‘It is just about impossible for international students to borrow money at this point. Can you help us?’” says Judy Phair, a spokeswoman for GMAC.
GMAC was able to get the financial aid administrators from the schools in touch with Moehn Management, a new company founded by Kevin Moehn, a former Sallie Mae student loan executive. Moehn was able to bring the bank and schools together and was a “key participant’ in brokering the deal, Phair says.
The pilot program will include a number of schools that were stranded last fall when loan providers such as CitiAssist and Sallie Mae pulled the no co-signer loan programs that most international students depended on to fund their education, says Phair. Most importantly, the pilot will provide students with loans that don’t require them to secure co-signers, a provision that international students have been clamoring for the last few months.
Only a handful of schools have signed on, but Phair say she expects about 40 schools will participate. So far, the Chicago Booth School of Business and Duke University’s Fuqua School of Business are on board, Phair says.
The loans will be available to students for the 2009-10 academic year. If the pilot is successful, the bank may allow more business schools to participate, Phair says. “Obviously, our hope and expectation is that it will expand to a much larger group.”