How to Pay for an MBA | GMAC Delivers No-Cosigner Solution for International Students
Discovering creative ways to find money for your MBA (image: TW Collins)
New Loan Program for International Students Created at the Request of the Graduate Management Admission Council
SOURCE: Graduate Management Admission Council
Responding to a request from the Graduate Management Admission Council(R) (GMAC(R)), a leading international bank has joined with experienced service providers in student financial aid to create a new pilot lending program for international students who attend graduate business schools around the world.
The pilot is prepared to provide at least $500 million in loans to students in about 40 business schools in the United States and Europe, beginning with the 2009-10 academic year.
International students, who comprise a high percentage of all U.S. graduate business school enrollment, have been especially hard-hit by the financial crisis. They are not eligible for federal loans and several major lenders have terminated the “no-cosigner” student loan programs that were widely used by this group.
“Our role has been to act as a ‘convening authority,’ bringing together business school administrators, lending organizations, and other resources to help develop a solution to this challenge,” said David A. Wilson, GMAC president and CEO. “Schools greatly value the talent and diversity that international students add to the classroom, and we all want to ensure that these students and future world leaders continue to have access to graduate business education.”
The new lending structure is designed to be school-centric and school-controlled and is not dependent on any particular bank or group of banks. Students who borrow under the program will not be required to secure co-signers. Schools involved in the program will not own loans, incur up-front costs, or have liability for individual loan defaults.
A key participant in the project is Kevin Moehn of Moehn Management, Inc., a new company established to bring lending organizations together to facilitate student loans through a program that “delivers a sustainable and dependable structure for business schools to finance international students.” Moehn helped create the MBA LOANS program that provided billions of dollars in low cost loans to graduate business school students. Most recently, he was executive vice president of Sallie Mae, responsible for developing numerous successful programs to meet the special borrowing needs of diverse groups of students.
Wilson added that GMAC, which is a non-profit education organization of leading graduate business schools worldwide, may serve as an advisor to the program, but will have no management, operational, or financial interest. “Our job is to serve and help our schools,” Wilson commented. “GMAC has been a catalyst in this process. We were able to initiate and influence significant change, without actually being a part of it.”
GMAC, founded by a group of leading business school deans in 1954, also owns the Graduate Management Admission Test(R) (GMAT(R)), which is the world’s leading predictor of success in graduate management education and is taken by more than 250,000 students annually in more than 100 countries.
Read the original press release here.