In an exclusive pilot programme with Banco Santander, the school is supporting students who have struggled to find alternative sources of funding in a tougher credit climate. Some 90% of Saïd’s students come from overseas yet only 15% receive scholarships.
“It is very difficult for any lender to collect from someone who’s overseas”
Luis Juste, director of Santander Universities UK, told The PIE he was pleased with the partnership. “Enrolling in an MBA programme is an important decision for any student. They need to dedicate a lot of time and effort and most importantly, they need to think carefully about the cost involved.”
In most study destinations, international students cannot access government loans, which fund the majority of domestic students. Banks offer some support but have pared this back since the financial crisis began, given the higher risk of default among overseas students.
Business schools in the US are bucking the trend, however – working with crowd-funding firms such as SoFi and CommonBond, which facilitate loans through alumni investors. The University of Pennsylvania’s Wharton School, MIT’s Sloan School of Management and Stanford’s Graduate School of Business are among those with initiatives.
In Europe, INSEAD in France and Saïd have also run alumni-backed initiatives with UK-based Prodigy Finance (though Saïd’s relationship with Santander extends the support it offers). Schemes backed by banks and credit unions, which are already found in the USA, are likely to become more common.
The chance of loans being rolled out greater numbers remains slim, however. Most existing schemes are run by top business schools where foreign students have a lower risk of default.
“It is very difficult for any lender to collect from someone who’s overseas,” Mark Kantrowitz, publisher of student finance website FinAid.org, told The Financial Times in April.
“In the US you could sue and get their wages garnished [deducted], but you can’t do that overseas.”
Applicants admitted to Saïd’s Santander loan programme from September 2013 can borrow up to £20,000 at 10% APR. Santander Group must have a banking presence in the applicant’s home country, although exceptions may be considered.