List of some Business Schools in USA that offer loans to international students without a U.S. co-signor
Drawing up the laundry list of items that you have scribbled on a piece of paper, you rummage through the items that will form a part of your wardrobe for the next few years. Your checklist, when you go the US is filled with pressure cooker, crockery, some clothes, stationery, additional toiletries, a few shirts you have never worn but carry wherever you go, some socks and handkerchiefs that mysteriously go into hiding the moment you need them every morning etc. You steal a look at the visa imprinted on one of the pages of your passport that entitles you to set foot on the land you plan to go to. You are happy you are finally going. There is also the issue of tickets which you care to put away so carefully they sometimes go missing occasionally, diaries that you never part with and hardly ever write anything substantial in, and of course rice, daal and some spices. Can you ever forget the masala, daal and chaawal that will serve as important cost cutting measures in your quest for value meals?
Coming to costs, do you realize that in your manic quest to pack the favourite underwear, shirts, passport photos (since they are expensive anywhere but in India) and smallest of diaries in your suitcase, you may not work on some of the larger cost cutting measures? To accuse you would be doing injustice to the sincere and mammoth efforts you and others who have achieved the hard task of admissions, have put in. It would be appropriate to use the word overlook or rather, ignorance in this case. Many Indian students go to the US without a cosigner and end up piling huge sums of debt borrowed from Indian banks, with scary interest rates. Do you think that’s the only way to borrow?
Say it aloud…Do You Think Borrowing from Indian Banks Is the Only Way Out If You Don’t Have A Cosigner? Let’s figure this out.
To tell you the truth, there are ways and means by which you can actually get a loan from one of the US banks. Different schools have different regulations and arrangements with banks. You need to figure this out with the school itself how you can qualify for loans or aid that is cheaper and has a favourable repayment period. Loans in the US are repayable over a 20 year period. Many schools enter into an arrangement with a local or national bank that assumes the risk: London Business School is partnered with HSBC; Wharton, Harvard, Michigan and others with Citibank.
Jamie Millar, Director of MBA Admissions and Financial Aid at Harvard Business School, says in an interview that Harvard Business School has eased up requirements for loans and borrowings by international students that have no cosigners.
To a question how the school’s partnership with Citibank allows its foreign students to take out loans without the need for a cosigner, he says, “The key plus is that it provides access which didn't exist before. We had a lot of students who were perhaps middle-class people in their home countries who were willing to borrow. They were, in fact, creditworthy and would have been able to borrow, but there was no one that was willing to lend to them.”
He adds, “Most of these students suffered because they did not have U.S. cosigners. They didn't have natural relationships with relatives or employers in the U.S. that they could tap. So they really were prevented from seeking sources of financing. What that did is put an extraordinarily high burden on these individuals to come up with their own resources in their home country. It also effectively prevented many of these qualified people from even applying. It's a steal because it guarantees access for students of all nationalities. There is no need for a cosigner, no upfront fee, it has a very competitive interest rate (prime + 1/4), and students can borrow up to their total budget. What that means is that people from all over the world can afford to come to HBS if they're admitted.”
(http://www.businessweek.com/bschools/bsfaqna/bsfaqna19.htm)
For Olin, the international loans without a co-signer are limited to a maximum of $15,000 per year for the two years you are in the program. The loans are disbursed after your arrival and enrollment to students who are considered creditworthy. The school says that approximately 50% of the students, domestic and international, receive merit-based scholarships. The average amount of scholarship awarded to domestic and international students is $8,000 a year. Scholarships range in value from $1,000 to full-tuition. These scholarships though are very competitive.
Columbia University has a scheme where you can obtain a loan after you have spent a substantial amount of time at school and made acceptable progress. Here’s a clue. You can take a social security number the moment you start working on campus. There are numerous on campus jobs that you can take up. After you have taken up an on-campus job (or been offered one), you can file for a social security number immediately. Different schools in Columbia have requirements that are specific to that school. However, the provision for loan without a cosigner remains. You can see the categorization through the link
http://www.columbia.edu/cu/sfs/2001-2002/chart.pdf
It is a link that should be used to understand the broad criteria that exists for qualifying for a loan. Since this table is of the year 2000-01, you may not take the interest rates given here, into account.
The Duke MBA Opportunity Loan, launched last year, allows international students to get up to $30,000 over two years without requiring a US co-signer.
(http://www.economist.com/globalExecutive/Education/displayStory.cfm?story_id=1010838) All students admitted to the University of Michigan Business School, including international students, are guaranteed loan approval through CitiAssist without a co-signer.
(http://magazine.mba-center.net/index.php?site=magazine§ion=us&page=art7 )
In any university, to get a social security number, you need to talk to the international students and scholars office that exists on campus. They will help you out with the formalities. Once you file for a social security number it takes about four - six weeks to get the social security number. Once you have the social security number, it is essential to start building credit.
How do you build credit?
Well, all you need to do is ask the bank where you have a savings or a checking account to issue you a credit card. They will issue you the credit card once you have the social security number. After you have the credit card, you need to put your bills on the credit card and pay them on time. Remember to pay your bills on time so that you have the necessary credit history when you apply for a loan. When you have had six months of credit history, you can apply for a loan without a cosigner from the US at a lower rate of interest than what you will be able to get from a bank in India.
London Business School (LBS) has a partnership with HSBC and The Rotterdam School of Management with ABN Amro Bank. Piyush Mathur, who is currently doing his MBA at LBS, says: "After all, an international MBA is expensive even for native Americans and Europeans. Typically, these loans do not have any collateral requirements and the rate of interest is lower than what one can expect to pay in India." The repayment period can be up to 20 years.
(http://www.businessworldindia.com/feb2304/pf_studyloans.asp)
Indian students studying in the US are eligible for certain tax exemptions, while they are in the process of doing their academic program. This is a fact that is little known and this facility to Indian students emanates from a tax treaty between the US and India. Among the countries that the US has the treaty with, India is among the few countries in whose case the students do not have to undergo certain additional administrative formalities in filing for such a rebate that others have to go through. The treaty provision also states that Indian students who are married may claim a spouse exemption if the spouse is living with the student in the US and if the spouse had no earned income for the 2005 tax year.
(The specifics of the tax treaty may please be checked up with the international students and scholars’ office in your university as you may have a case that is specific to you). The following websites also give you useful information regarding tax benefits that you enjoy while studying in the US.
http://www.rpi.edu/web/isss/Taxes/india-treaty.html
http://www.unclefed.com/ForTaxProfs/Treaties/india.pdf
After you have completed the master’s graduation in the US, you are given time until one year to land an H1B visa. This period is known as the Optional Practical Training period or OPT. During OPT, you are not required to pay for your social security or Medicare. Once you start on your H1 then you are treated like any other US citizen for tax purposes. If you have a student loan in the US then you can deduct upto $2500 of interest payments made on your student loan. Keep in mind that you cannot include the principal amount while taking deduction.
Going back to where we started, we have been able to delve into resources that give you more options regarding loans at lower rates even though you may not have a cosigner. Also the Indo-US tax treaty helps you to obtain benefits that you may not have been aware of. There are ways and means to cut corners when you plan to venture on further professional studies abroad.
So at the end of the day, what is it that needs to be done. We would suggest that you strategize when you apply to schools. Check the schools that are ready to give you loans without a cosigner or schools that give you loans after 6 months of acceptable credit history in the US. Get a social security number in the US as quickly as you can. It opens doors to many things. For instance, if you want a mobile phone (as simple as that!), you don’t need to put down any deposit only if you have a valid social security number. And mind you deposits can be up to US$500 which are gotten back only after a year. However it doesn’t mean that availability of loans are the only criteria to select or shortlist a school. But it does make sense to delve deeper and look into what is available, resources and benefits that will help lessen your debt.
Money matters when you are paying for education.
List of some Business Schools in USA that offer loans to international students without a U.S. co-signor
University of Pennsylvania (Wharton)
Harvard University
Massachusetts Institute of Technology (Sloan)
Northwestern University (Kellogg)
Stanford University
Columbia University
University of Chicago
Duke University (Fuqua)
University of Virginia (Darden)
New York University (Stern)
Dartmouth College (Tuck)
University of Michigan, Ann Arbor
Cornell University (Johnson)
Yale University
University of North Carolina, Chapel Hill (Kenan-Flagler)
Loans cosigned by a US permanent resident are also available for international students.
Visit http://www.studentloan.com/ and http://www.accessgroup.org for details on the above two categories of loans.
Other sources:
http://www.olin.wustl.edu/finaid/eligibility/mba/schol.cfm
http://www.economist.com/globalExecutive/Education/displayStory.cfm?story_id=1010838
http://www.columbia.edu/cu/sfs/2001-2002/chart.pdf
http://www.businessworldindia.com/feb2304/pf_studyloans.asp
http://www.columbia.edu/cu/sfs/2001-2002/chart.pdf
(Disclaimer: Please check on the loans availability and tax applicability with the international students and scholars’ office in your university as you may have a case that is specific to you. In no event shall 6bridges.com be liable to any person for any decision made or action taken in reliance upon the information provided herein.),,,,,,,,,
|
|