Lender Doubles Loan Limit and Offers Refinance to International MBA Students

MPOWER financing recently announced two new initiatives to make it easier for international students to attend US and Canadian schools: a loan limit of $ 100,000 and a refinancing option for those working in the United States.

Carlos Gomes is a lawyer by training, but by the time he decided to pursue an MBA he was more in business than in law. When the 40-year-old from Sao Paulo, Brazil, learned he had been accepted into a Top 20 MBA program in the United States, he began preparing for his family’s move to Los Angeles.

It seemed like the start of a new chapter. The median starting salary for MBAs at USC’s Marshall School of Business, where Gomes was accepted, is around $ 150,000. He was planning to work in investment banking in the United States after graduating from a year full-time. His future note seemed anything but punched.

There was only one problem: the money.

While Gomes was able to secure a loan of $ 50,000 from MPOWER Financing, it was turned down by other lenders who drastically tightened lending in the wake of the COVID pandemic and because it did not have a U.S. co-signer.

“The payments, for me with my wife and my daughters, are almost $ 200,000”, Gomes told Poets & Quants in April. “All we have is a little savings value, but not the full amount. “

$ 100,000 LOAN LIMIT AND REFI OPTIONS

To make it easier for students like Gomes, POWER – a fintech company offering school loans to very promising international and DACA students – recently announced two new initiatives: the company doubled its loan limit from $ 50,000 to $ 100,000 this fall and, a few weeks later , announced a refinancing option for international graduates working in the United States.

Emmanuel “Manu” Smadja, CEO of MPOWER

Unlike more traditional student aid lenders, MPOWER does not require a credit score, collateral, or co-signer. Instead, it offers loans based on a student’s potential for future earnings.

“The mission has always been very, very personal for me”, co-founder and CEO of MPOWER Emmanuel “Manu “says Smadja Poets and Quants. “I myself was an international student 22 years ago. I came from France to the United States, and I did my studies well, but I had financial difficulties. This is really what planted a seed in my head.

POWER took the lead in response to messages from students indicating that they needed more financial support, Smadja said. “We were listening. Following our Capital city infusion this summer, we are delighted that we can now offer more monetary resources to make obtaining an education in the United States and Canada more accessible.

The new refinancing program is available to international and DACA students who have graduated from a US or Canadian university and have at least three months of work experience. OPT, H1-B and a wide variety of other work permits are eligible.

“Being able to refinance my Indian student loan has been such a relief. Since graduating from the University of Florida I have had a fantastic job in my chosen field of IT, ”said Aniket Sinha, a recent refi client. “However, I was still concerned about my loan repayment, as well as my parents still being forced to repay it. With MPOWER, not only do I save thousands of dollars every year, but I also have the peace of mind that my parents are free and no longer charged as co-signers as they head into retirement.

MAKING AMERICAN EDUCATION POSSIBLE

By definition, international students generally do not have a required U.S. co-signer for Federal Student Aid and other domestic lenders. This means that international students have to borrow in their home country, which usually requires a collateral, often held by the parents of the students.

This is a circumstance that Smadja knows all too well. The French citizen has worked at leading financial and advisory firms in the United States, including McKinsey & Company, Capital One and Vistaprint. But when he wanted to get an MBA at INSEAD, he went through months of a stressful loan application process that ultimately turned him down. He was eventually able to get another loan, but he had to put his parents’ house as collateral and the company froze his father’s retirement accounts.

MPOWER Fundraising Logo“I was like ‘Wow. I’m a French citizen. I worked in the US and I’m going to do one of the best MBA programs in the world. You could literally see the money on the other side,” he said P&Q. “It was a huge financial burden on my mom and dad. I thought how much more difficult it would have been if I was from a middle income family in India, China or Latin America.

Smadja co-founded MPOWER at Harvard in 2014, and he now funds international students from 180 countries attending the top 350 universities in the United States and Canada. Half of its students come from Asia, of which around 20% are from India. They also serve large contingents from sub-Saharan Africa and Latin America. The company uses the word international a bit loosely, says Smadja. In addition to funding traditional international students with F1 visas, it also serves refugees, asylum seekers, DACA students, and a few American students who fall through the cracks of the loan system.

Rates for Deferred Action for Childhood Arrivals (DACA) students start at 6.49% flat, which is competitive with federal rates, says Smadja.

“I think it can be difficult for DACA students to trust a financial entity, especially with all the noise that has been going around the government level over the past few years. And we want to make sure they understand that we are an ally, ”says Smadja. “They really came here and had to endure all kinds of discrimination growing up, being kind of treated like literally second-rate citizens. During this time, all they want to do is study. That’s why we’re very passionate about it. It’s also empowering, they are very bright and hardworking people who just deserve a chance.

Next page: Why International Students Are Important To American B Schools And A Happy Ending

Page 1 of 2


Source link

Comments are closed.