Paying for Business School: International Students

According to the GMAC 2008 Global MBA GraduateSurvey, 24 percent of students worldwide are earning their MBA degreeinternationally, in a country where they do not have citizenship. Intop U.S. business schools, the percentage of foreign students hoversaround 30 to 40 percent. U.S. business schools heavily recruit foreignstudents through MBA fairs and other admissions events around theworld. International students greatly increase the diversity of voicesin the classroom, and the percentage of foreign students is taken intoaccount by the organizations and publications that rank businessschools. However, when economic disaster struck last year, credit--andtherefore student loans--became hard to find, especially for non-U.S.students. In October 2008, CitiAssist pulled its custom loan program--aloan program that had, until then, been a go-to for non-U.S. MBAs. Alsoin late 2008, many other banks and lenders (such as Sallie Mae)cancelled all non-co-signer loans, again hitting non-U.S. studentshard. While U.S. citizens still had other student loan options throughthe federal government, prospective international students seemed outof luck. With the 2008-2009 admissions process in full swing and theNew Year fast approaching, business schools worried about how theywould maintain their international student bodies.

Happily, the new year brought new hope forinternational applicants. When CitiAssist pulled the plug on its loanprogram, the Sloan School of Management turned to the MIT FederalCredit Union, and in January 2009, the school announced that the MITFCUwould offer a custom loan program for students, including internationalones. The Yale School of Management followed suit in March 2009,creating its Yale International Student Loan, which are fixed-rate,non-co-signer loans. Other top business schools have also turned inwardto find funding options for students, and developed programs throughtheir university credit unions and/or by revamping existing financialaid programs.

At the same time, non-businessschool organizations stepped up to help international students fundtheir business education. In February, the Graduate ManagementAdmissions Council (GMAC) announced that, at its urging, a "leadinginternational bank" is partnering with other loan providers on a new,pilot program that will provide at least $500 million in loans tostudents who are earning their MBA in a foreign country (i.e., for that24 percent of all students studying in a country that is not theirhome). GMAC president and CEO David A. Wilson cited the importance ofinternational students in the quality of business education as a keyfactor in their decision to create the program: "Schools greatly valuethe talent and diversity that international students add to theclassroom, and we all want to ensure that these students and futureworld leaders continue to have access to graduate business education."

Clearly, business schools are committed tomaintaining the diversity of voices and nationalities in their studentbodies. They rely on international students to diversify the studentbody and to bring a variety of perspectives to the classroom. Moreover,a recent increase in focus on international business in MBA curriculareinforces the importance of international voices in the student body.Schools and the MBA community will not let international studentnumbers dwindle.