A piece in the Economix column of the New York Times earlier this week called attention to troubling news regarding the impact of the current credit crisis on the availablility of student loans to MBA students, particularly private loans administered through the CitiAssist program for international students.
The piece, entitled “Credit Crisis Is Bad News for M.B.A. Students” excerpted an email message sent to students Monday at MIT Sloan School of Management. According to that message, Citibank has exercised its 30-day option to cancel the CitiAssist custom student loan program with MIT Sloan, effective November 2, 2008.
The Economix column went on to explain that students who have already had their loans processed and approved by Citibank appear to be safe, but that those who still need to secure financing face greater problems. “The school is now helping students scramble to find alternate financing,” the Times reported.
The problem is not limited to MIT Sloan. The CitiAssist program is also ending at the Ross School at the University of Michigan, according to the school’s own website.
Information listed on the Ross site about the CitiAssist program indicates that of the 3,500 University of Michigan students who took out private loans in 2007, 68 percent did so through the CitiAssist program. But a bulleted point highlighted in red in the program description reads, “This loan program will end on 11/02/08. Priority date for applications is 10/15/08. Applications received after this date may not be processed.”
In a phone interview this morning, Randall Sawyer, dean of admissions for the Johnson School of Business at Cornell University, said that as he understands it, Citibank has removed its CitiAssist program from all of its schools for international students without a domestic cosigner. Harvard Business School and the Wharton School at the University of Pennsylvania have also historically been part of the CitiAssist program.
“It’s affecting us, though not on a huge scale,” Sawyer said, indicating that schools with greater numbers of international students could be facing a larger-scale problem. “It’s certainly something that we are talking about though,” he continued.
According to Sawyer, even students who have secured funding for this year may still be unsure about whether they will find funding for next year. “At this point we don’t have any official release about the situation,” he said, but he indicated that Johnson would do its best to help students find alternate sources of funding.
Clear Admit plans to stay on top of this unfolding situation as it impacts prospective MBA applicants. Watch this space for more details as they become available.
