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New Loan Program Signals Breakthrough in MBA Financial Aid
Topics: Education-Financial AidImagine being accepted into the Harvard MBA Program only to realize you can't afford to enroll. This unfortunate scenario is quickly becoming a thing of the past, thanks to an unprecedented new loan program introduced last spring.
HBS recently finalized an arrangement with the Student Loan Corporation, a subsidiary of Citibank, that allows MBA students to borrow funds through a customized version of Citibank's private CitiAssist program. Citibank will be granted preferred lender status with MBA students at HBS, although students can still borrow from any lender.
"This is a major strategic tool to attract exceptional young leaders, particularly those from outside the United States," says James T. Millar (MBA '92), director of MBA Admissions and Financial Aid. "No other business school offers anything like it."
The new program includes a number of compelling features, such as low interest rates; no loan origination or guarantee fees; guaranteed approval for all HBS MBA students; availability to any HBS MBA student, without a cosigner, regardless of the student's citizenship; no minimum loan; maximum loan equal to the student budget less other financial aid; loan repayment over fifteen years; and prepayment option without penalty.
Previously, access to private loan programs was generally limited to U.S. citizens and permanent residents with a strong credit history. These loan programs typically required either a significant loan origination fee or a relatively high rate of interest.
The new arrangement, unique to HBS among business schools with similar cost and financing structures, eliminates access limitations based on citizenship and creditworthiness - hurdles that have discouraged potential candidates from applying to the MBA Program in the past. "The program gives all HBS MBA students access to competitively priced loan financing, without fees," says Millar. "As a result, all students admitted to the MBA Program should be able to arrange the necessary financing."
MBAs at Harvard have already benefited from the new loan program. Of the Class of 2000, at least one-fourth of those using the CitiAssist program would not have qualified for private loan funds before this year.
Editor's Note: Citi is no longer in the student loans business and the loan product, CitiAssist, is no longer available.
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