International Plight: Admits To U.S. MBA Programs Can’t Get Loans

Fellowships at U.S. business schools famously favor domestic students, though every school is different. At Dartmouth College Tuck School of Business, every admit is automatically considered for a scholarship, regardless of country of origin, with special attention paid to “outstanding students who, absent funding, might not attend the Tuck School,” according to Sandra Belisle, Tuck’s assistant director of financial aid. Tuck scholarships range from $10,000 to full tuition, with the average being $29,290. The school also has loan options for international students, including custom loans that do not require a co-signer through which international students are eligible to borrow up to 80% of the cost of attendance annually.

UC-Berkeley Haas School of Business has a loan program for international students that does not require a co-signer, with loans (current interest rate: 5.74%) limited to $40,000 per semester. Peter Johnson, Haas’ assistant dean for the full-time MBA program and admissions, says those parameters will change in the new academic year; what’s important, he says, is that schools give international students every chance to pay their way to enrollment.

“I think what’s important for a school to focus on if they value their international student population is to be continually looking for partner organizations that are willing to serve as a lender,” Johnson tells P&Q. “And in many cases, they will ask the business school to risk share. And I think schools have to be willing to at least have those conversations in order to get options that will work for their student population. Because I think if an institution has this kind of relationship with a lender, then the students are not completely at the mercy of what’s happening in the financial markets.

“One of the challenges is that the economic situation in a number of countries has fluctuated quite a bit during the pandemic. And I think in some cases, students have the funding, but banks are concerned about them being able to pay. We’ve had students who have experienced difficulties in specific countries with getting approval to actually transfer their own money because they’re in a country that has now adopted currency restrictions.”

INSTANT ORIENTATION

Sarah Perez

International students are commonly 40% or more of the MBA population in any given class at U.S. B-schools. Though that number dwindled during the Trump years, it is expected to rebound. Some schools are hoping for — and needing — a rebound more than others. At UNC Kenan-Flagler School of Business, the international MBA population dropped to just 11.5% in the fall 2020 incoming class, lower than any other top-25 school.

Sarah Perez, senior academic leader for program strategy for growth & scale at UNC Kenan-Flagler, tells P&Q that her school has an automatic orientation for all MBA admits that includes briefing on financing options. The school really tries to make it an easy process, she says.

Everything is on our website,” Perez says. “They can look at applying with a co-signer, without a co-signer, whatever their particular situation is. The first thing Susan Brooks, our financial aid assistant director, does when she speaks to students is tell them to apply today. So if you’re thinking about your MBA, you’ve been admitted, you’re looking at Kenan-Flagler or any other school, get in touch and start applying today. The financial situation is different than it was two years ago, and being able to get access to loans and being approved for loans might look a little bit different.”

Perez points to fellowships, but acknowledging that those don’t cover everybody, adds that UNC also works with Discover, the credit and personal finance giant. Discover “has options for international students that are attending Kenan-Flagler. They will loan, if approved, up to $40,000 a year that can be used toward tuition and also expenses.”

Perez says UNC, which currently has one more admission round to go this cycle, is concerned about its international student population, which has fallen more than 60% since 2016.

“We want the most diverse class in every aspect of the word, and international students are a really important piece of that experience for all students — for the international students, but also for the domestic students,” she says. “Learning from each other, networking, learning about cultures, learning about business and other places, it’s a critically important part of the experience, and our numbers were very low. We allowed our international students to defer in July knowing how things were looking, and we think we made the right decision and many of them did differ, and we’re excited that many are planning to come and join us in the fall. We certainly are planning to be in-person in the fall and, and plan to have a very robust international class.”

GETTING CREATIVE

Schools differ widely on their approach to helping international admits. As one student recently wrote to P&Q: “Sorry to conclude this: but many schools don’t seem to care much about this situation and yet in their marketing they are a bit vague about the resources for international students — in other words, apply anyways, and then when they get in, they say, ‘OK now find a way to go.’ Robust transparency at the beginning would save a ton of anguish.

“A decade ago many top schools had relationships with banks and many offered through these banks non-cosigner loans to internationals. Nowadays many have relied on Prodigy to give the loans to international students, and the schools have been lax when Prodigy didn’t/couldn’t deliver. This hurts EVERYONE, I think.”

Eryn Schultz is the founder of Her Personal Finance, an online financial education platform that helps recent MBAs and other high earners get in control of their finances. A 2015 Harvard Business School graduate, she recently wrote about international student loans for Poets&Quants.

For admits like Luis who cannot secure a U.S. co-signer, who are not going to schools that help with loans, and who have been turned down by Prodigy, Schultz says it may be time to get creative.

“I have been told that in this instance people will often choose their program based on where they CAN get funding, but assuming that they have a $10-$30K / year gap after MPOWER loans and financial aid, I would go to my financial aid office and ask them for additional aid to cover the gap. They want you to accept their offer of admission and they might be able to help you since you have exhausted the other options.

“I would also apply for scholarships — there may be some specific to their home country. If they have a $10K gap and can get $5K in scholarships and $5K from their school, that would do it.

“That’s all I can think of other than choosing to go to another program with a better financial aid offer or financing options.”

DON’T MISS WHERE INTERNATIONAL MBA STUDENTS GO IN THE U.S. TOP 50 — AND WHAT THEY’RE PAID AFTER GRADUATING and HOW INTERNATIONAL STUDENTS CAN FINANCE AN MBA IN THE U.S. 

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