Dartmouth's Tuck School of Business, in conjunction with the undergraduate college, will offer a new institutional loan for international students attending the business school, Tuck announced last week. The new loan is intended to provide financial aid to students who are having increasing difficulty obtaining private loans in the current economic climate, according to Tuck assistant dean of administration Steven Lubrano.
"The financial crisis caused lack of access to capital," Lubrano said. "That affected loan programs across the country and across the globe."
The new loan initiative comes after Tuck, like many other business schools, lost its ability to offer international student loans due to the financial crisis. In partnering with the College to offer the loans, Tuck avoids having to use a third-party underwriter.
"That's very unique, that Tuck partnered with Dartmouth College," Tuck Director of Admissions Dawna Clarke said. "Most other business schools are going through third parties."
Many of the third-party loans are expensive or have terms unfavorable to international students, Lubrano said.
The new loans offered by Tuck, unlike many private loans, will not require applicants to have a U.S. cosigner or a U.S. credit history, Lubrano said, although students will have to provide some financial information.
"[Applicants] will provide financial statements," Lubrano said. "We'll want to see that they have some credit history in their countries."
Lubrano said he expects a "significant number of students" to take advantage of the loans, which students will have 10 years to repay.
Although the loan is a "Dartmouth College loan," Lubrano said that Dartmouth will not suffer if a student defaults.
"Dartmouth is not out any money," Lubrano said. "The Tuck School takes responsibility for any defaulted loans."
Default rates on past international loans have been "miniscule," Lubrano said. Only three international students who were recipients of loans from Tuck have defaulted out of the thousands of loans written over the last 15 years, he said.
"This is among the most credit-worthy group of individuals one could give a loan," Lubrano said. "If I had enough money to underwrite these loans, I would do it."
Roughly one-third of the student population at Tuck is comprised of international students.
