University will co-sign international grad students' loans

To aid students struggling to pay tuition costs as a result of recent economic downfalls, Penn's Board of Trustees passed a resolution last month stating that Penn will share risk with a U.S. bank that has yet to be named to secure loans for international students.

The new program allocates risk of losses up to 10 percent to the bank and losses above that to Penn. Student Financial Services director Bill Schilling wrote in an e-mail that he hopes the bank will be named "within a couple of weeks."

The University previously had a risk-sharing program with Citibank that was terminated in December.

From July 2001 to June 2006, the University entered into an agreement with Citibank that helped provide loans to international students primarily in Wharton's Executive MBA Program and Lauder Program - in which students pursue both an MBA and a Master's in International Studies - without requiring a U.S. credit-worthy co-signer. In July 2006 Citibank assumed the full risk.

Students in the Law School, School of Dental Medicine, School of Veterinary Medicine and School of Medicine have also taken advantage of this program.

But Citibank discontinued international loans in December due to liquidity problems in current credit markets. Students who secured loans for the present academic year have received them, but no new loans can be requested by continuing or prospective international students.

The Graduate and Professional Students Assembly has been meeting with Penn's Vice President for Finance and Treasurer Steve Golding, as well as Student Financial Services since last semester in regards to this issue.

GAPSA Chairman Andrew Rennekamp, a Penn Med Ph.D. student, said Penn is in talks with a "preferred lender" that is "narrowly interested" in sharing risk for Wharton students.

He explained that Penn hopes to extend the privilege to all schools and is looking for additional lenders, but since all schools operate financially independently for the most part, it is up to each individual school to offer this program to students.

"The other schools have not expressed interest due to a perceived lack of demand from their students," Rennekamp said, adding that GAPSA believes international students in all schools would be interested in the program if they knew it was an option.

The GAPSA International Student Council met with SFS before spring break. According to Rennekamp, SFS reported that they are still finalizing a lender and Wharton and the Law School are the only schools seriously interested in risk sharing.

Schilling explained that almost 90 percent of the loans went to Wharton students in the current academic year under the former Citibank International Loan program.

"Each school has to weigh the costs of participation, in a very tight budget year, against the criticality of the program to their enrollment goals," he wrote.

Wharton Dean Tom Robertson sent an e-mail to students before spring break saying that though the school may eventually end up with more than one program, it is currently in the final stages of discussions with a new lender and expects to announce the program in about a week.

"There is a strong commitment . to protecting the continuing students who borrowed through Citibank in the past," Schilling wrote.

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