According to Emmanuel Smadja, chief executive officer of MPOWER, Covid-19 has created financial stress for a lot of families around the planet.
“We’ve seen a massive surge in loan financing for international students”
He explained that people have less liquidity to pay for their (or their child’s) overseas education, and thus need to borrow more.
“There has definitely been a surge in international student lending demand across the globe, particularly for digital platforms like MPOWER,” Smadja told The PIE News.
“At a time when a lot of families around the planet are confined and bank branches are still shut down, digital lenders like MPOWER, which let you apply from the comfort of your home via your smartphone… have seen even more demand.”
Smadja said that financial stress on families due to Covid has resulted in large numbers of prospective students borrowing under their name, without a cosigner or home as collateral.
In this way, students can be independent and not a financial burden on their families.
Now, lending companies are increasing their offering for students to meet the increase in demand according to Akshay Chaturvedi, founder and CEO of Leverage Edu.
“We’ve seen a massive surge in loan financing for international students. On our platform, we serve as an aggregator, bringing to students best-matched options from over a dozen education finance providers.
“Lately, not only are more students opting for flexible loan programs, but we are also witnessing financial companies coming out with interesting student-friendly products, which as a student-first platform we are very happy and excited about.”
Prodigy Finance has seen the average overall requested loan amount grow by more than 7%. This figure was higher for MBA and engineering students, where increases of 9% and 10% were seen respectively.
“These changes are due to reduced personal savings, potential changes in school financial aid and the impact of the current global pandemic on many currencies,” said Joel Frisch, head of schools for Prodigy Finance.
While Covid-19 has played a part in the increase in demand, Smadja noted that an ever-growing number of international students who want to travel abroad to study, was still one of the main reasons for the surge.
“The number of international students globally nearly doubled in the past decade; Canada, in particular, saw a jump by courting international students through good education quality, affordable tuition, and immigration-friendly policies,” he said.
Smadja explained that an international education used to only be affordable to the affluent population of certain emerging markets.
“Today, an increasing number of bright minds who come from more modest means want that same opportunity, and financing platforms like MPOWER allow them to realise their educational potential.
“This is helping to create the market,” he added.