F1GMAT Interviewed Liz Reid - the Student Brand Manager at Prodigy Finance, to learn how they have funded hundreds of international MBA students.
1. How did Prodigy come into existence?
Prodigy’s Founder, Cameron Stevens, experienced firsthand the challenges of financing an international MBA when he attended INSEAD as a South African, who had been living in Malaysia. When he got to INSEAD, he realized that this challenge was shared by many of his classmates. He and two other MBA students set out to solve this problem shortly after graduating.
2. How does Prodigy Finance works?
Prodigy offers community funded loans to international MBA students attending top business schools. The loans are funded by a combination of business school alumni investors, the business school community, and institutional investors who have an interest in higher education. Students gain access to funding for their postgraduate degree that they often could not afford otherwise. To be eligible for a loan, students need to be studying abroad (that is, outside their country of nationality or residence). The only exception is that UK students studying in the UK are eligible....
MBA Loans are hard to come by in Europe, and post-2008 crises, Banks have been extremely cautious. In 2012, the situation worsened in UK after Citibank pulled out of their Citi Assist loan program. Under such hostile environment, a Santander MBA loan is a relief. The loan funds up to £20,000.
Top Business Schools in 2013-14 that are the beneficiary of the Santander Universities Partner Institutions loan or scholarship program include:
1) Ashridge Business School
2) Cass Business School
3) Cranfield and
4) Oxford Said
Rate of Interest
For Oxford Said, The Santander Universities Global Division is supporting MBA students with personal loans of up to £20,000. This is for students joining the Sep 2014 program. The Loan terms range from 12 to 60 months
Loan Range: £1,000 - £7,499 (Interest 12.5% APR)
Loan Range: £7,500 - £20,000 (Interest 10% APR)
• Qualified to Stay in UK during...
Applicants get the first taste of the MBA program through Brochures – the condensed information about the program’s history, course structure, cost, funding, testimonials, uniqueness, and statistics. The decision to pursue the marketing team with clarifications and interjections happen after comparing the data in the brochure with inputs from well-meaning alumni and current students. Can you look much closer and understand what these statistics mean?
“The MBA is a huge investment” sermon might have bored you but most applicants look at MBA from an investment in a 5-year horizon. 27-30 age is a time when some of the major events happen in your life: marriage, family and career switch. There are stories of MBAs in 30s making the switch but for most of you the decision is now. Opportunity cost is looked upon as an investment of time but not many experts talk about the investment of $75,000 or €45,000 per year (for European school). When you are sunk in debt, opportunities are looked with the backdrop of paying back your debt. The risk taking appetite goes down and the true value of an MBA is never fulfilled.
HEC Scholarships can be broadly categorized into Merit Based and Need Based scholarships(scholarships on other criteria also exists) .To be eligible for the scholarships, admitted candidates must provide their financial status and details of how they plan to finance their studies.
Scholarship Application Process: Online
Essay Required: For Some scholarships, an essay is required
Interview Required: For Some scholarships, interview is required
When to Apply: On Admission to HEC MBA Program
Criteria: Merit-based, Need-based and Specific criteria in other cases
HEC MBA Need Based Scholarship
The HEC MBA Need-Based Scholarships are designed for only those applicants who require financial assistance to achieve their goal of joining the MBA program at HEC Paris....
SoFi is another major loan provider that has entered the $1 trillion Student loan market in the US. With over $200 million distributed to over 2500 borrowers, SoFi is leading its competitors: Prodigy Finance and Common Bond. Sofi depends on Business School Alumni to fund students. Alumni earn a handsome 5% return on their investment while students get loans at a much better rate than Federal Stafford loan for Graduates (5.41 percent), and the Federal Direct PLUS loan (6.41 percent).
As always, the deciding factor between loan providers is the interest rate and the terms associated with it. As of 2013, Sofi offers a variable rate starting at 2.92% APR (Annual Rate) and a fixed rate starting at 4.99% APR.
The loan repayment period is based on the individual’s financial status, credit history and the terms agreed upon for the loan term. However, in exceptional cases where students cannot meet the monthly minimum payment, there are hardship programs that offer relief for students...
France offers several state supported loans, private loans from French Banks and school specific scholarships to meet the tuition fee and living expense, during an MBA program.
We have shortlist some of the popular funds.
1) Prodigy Finance
Insead MBA Alumni Founded Prodigy Finance in 2007 and has distributed over $30 million to students from 80 Countries with an astonishing repayment rate of 100%.
Maximum Amount: Covers the Tuition Fee (Average Amount: Euro 30,000)
Terms of Payment: 7 Years with 6 Month deferment at an Interest rate of 7.5%
This is a unique state supported scheme that allows Employees currently employed in French Companies to take a leave of absence for training (higher education) purposes.
- Should be employed in a French company for a minimum of 1 year
- Companies with more than 9 Employees should contribute towards the training
- Company should cover 100% of Salary if the...
CommonBond, has recently announced that it will disburse $2.5 million in student loans at Wharton, benefiting as many as 50 students. What makes this significant is that the loans are funded by Wharton alumni itself. CommonBond is a startup founded by Wharton Alumni. They oversee the disbursal process. At the heart of CommonBond's effort is a philanthropic quest - a positive social change. A case in point is that for every fully-funded degree, the company will sponsor a child's education, for a year in partnership with the African School for Excellence.
The news is a boost to the nascent alumni-sourced loan industry, which seeks to ease the difficulties faced by MBA students looking for loans. Students do not have to put up with the intense scrutiny and paperwork, which they must go through otherwise. And even more significantly, the interest rates are just 6.24%, lower than the lowest Federal loan rate of 6.8%. Private loan rates go even higher, averaging around 12%. Alumni who contribute to the loan pools get returns of above 4.25% - profits with a cause attached. What's more, the risk factors are very low. The 10-year cumulative loss rate estimated for the Wharton loan pool is around 0.70%.
Students in Australia have a wide range of options when it comes to financing their MBA. While nearly every bank offers a student loan of some sort, the Australian government provides the best interest free loans with flexible repayment options.
FEE-HELP (Higher Education Loan Program) is an Australian Government scheme that helps students finance their education. Only tuition fees are covered under this scheme and there is no conventional interest as such. Accommodation, travel and study material are not covered.
1. The university should be an approved FEE-HELP provider
2. Australian citizen or permanent humanitarian visa holder or permanent resident or a permanent visa holder
3. Meet the tax file number (TFN) requirements. If TFN is not available, a Certificate of application for a TFN in necessary
FEE-HELP loan limits: $93,204
• This limit is a lifetime limit. It cannot be altered by any repayments made
• Previous study or other debts does not affect the limit
UK Government supports Management education with Career Development Loan (CDL), Adult Dependents’ Grant, Access to Learning Fund and Disabled Students' Allowances (DSAs).
1) Career Development Loan (CDL)
The UK government’s Department for Education and Skills (DfES) facilitates the Career Development Loan (CDL) to fund MBA studies in the UK. This loan allows a maximum funding of £10,000 for up to two years of learning, plus up to one year's practical work experience if it is part of the course. The government pays interest while the course is on, and repayment usually starts one month after the program is completed.
CDLs are currently available through four banks: Clydesdale Bank, Barclays Bank, the Royal Bank of Scotland and the Co-operative Bank.
No collateral is required.
Loan limits: £300–£10,000 in £50 Increments
• 18+ years of age
• Been living in the UK for a minimum of 3 years before the program begins • The right to indefinite stay in UK
• Plan on working in the UK, EU or European Economic Area (EEA)...
The United States Department of Education offers student loans for graduate studies including the MBA. These loans are offered at lower interest rates, with ?exible repayment terms that include repayment starting after graduation and deferred payments. Loans are awarded in conjunction with the Business School, and payment is made directly to the institution, usually in 2 installments per year. All loan funds must be used only for education expenses. Every Year, the entire Federal Student Aid program disburses more than $150 billion in grants, loans, and work-study funds. Students must complete the Federal Financial Aid (FAFSA) form to determine if they are eligible.
Earlier, subsidized loans at less than 4% interest were available, with the government paying the interest until the repayment period. In August 20111, the US Congress signed The Budget Control Act of 2011, which states that graduate studies cannot be subsidized from July 1st 2012 onwards.
Points to note while applying for federal aid:
1. There is no parental income cut-off that prevents a student from qualifying for student...
Stanford GSB provides fellowships and loans based on financial need. However, for candidates who need loan on a non-need basis to cover their expenses, Stanford team will arrange private lenders.
The MBA Admissions team advises against part-time jobs during Stanford MBA program. Here is what they had to say:
“Due to the rigorous nature of the MBA curriculum, you should not rely on part-time work to defray the cost of the program. The GSB does not offer college work-study. Rarely, research and/or teaching assistantships are offered to MBA students”
1) Stanford GSB Fellowships
Eligibility: All Nationalities
Criteria: Demonstrate Need
How Need is calculated?
Need = Budget - assets+income+contribution from parents, friends, employers and outside fellowships
The Financial Aid Office also performs analysis of all assets both liquid and non-liquid, when determining the eligibility.
Please note that the loans are not considered when evaluating the fellowship need.
How to Apply: No separate application required but you...
A global loan program is open to all students, regardless of nationality and level of income before the MBA, with no guarantee or co-signer required. Students can also apply for various scholarships that are awarded by the school, the Alumni Association and corporate sponsors.
For details on how you can finance your MBA, contact the Admissions Department.
Several scholarships are available to incoming IESE students. Scholarship applications should be completed and submitted to the Administration Department with the MBA application form. No organization may be approached directly. Recipients will be informed of any award as soon as a decision is made by the Scholarship Committee.
Number of Awards: 20 to 30 scholarships
Criteria: Students with outstanding academic records, excellent professional experience and personal merit.
Amount: The scholarships cover 25% or 50% of tuition fees.
Committee: The MBA Admissions Scholarship
Number of Awards: 1
Criteria:outstanding candidates with verifiable financial constraints
Students of all...
Once you’ve made the commitment to take an MBA, the question that first comes to mind is, “How will I manage it?”
Logistics aside, financing an MBA comes with a hefty price, running $100,000 USD or more. Justifying the cost in today’s economic job market is a reasonable deciding factor. Stay confident. Students from every background and circumstance have found ways to go after their dream and find the perfect job to fit their career goals. By examining how they did it – you can too.
Start at home
Look at your budget and begin with a clean slate if possible. If you’re heavily in debt, consider postponing school until you’ve got a manageable financial plan in place.
• Include your family in the decision. Apart from the study time involved, for the next two or three years you could be feasting on hamburgers at home instead of eating out. You need to know everyone is in your corner in cutting costs.
• Budget for the length of the program and only with funds you can trust will be there.
• Research. Find out what scholarships, loans, and grants could be available to you. This is a business decision as well as a career choice.
In the US, federal loans, for instance, have better...
MIP per l'Abruzzo
MIP, the BUSINESS SCHOOL of Politecnico di Milano, offers a full scholarship “MIP per l’Abruzzo” of 26.000€, corresponding to the entire tuition fee of the MBA program.
Further info on MIP per l'Abruzzo
BCG - The Boston Consulting Group and ITALCEMENTI Group
No of Awards: 2
Amount: Full scholarships
Criteria: Outstanding Profile
Note: For classes starting in May 2010. In order to apply for these scholarships you need to submit your application together with MBA required documents to firstname.lastname@example.org.
TOTAL MBA TUITION FEE: 26,000 (+ 1,700 € University Fees) ...
The Woodruff and Goizueta Fellowships
Amount: Full tuition and fees and a $3,000 per year stipend guaranteed for the length of the Full-Time MBA program.
Criteria: Academic achievement, quality of work experience, demonstrated leadership and extracurricular activities
Amount: Covers tuition for the course of study.
Criteria: Academic achievement, quality of work experience, demonstrated leadership and extracurricular activities
Research and Teaching Assistantships
Process: Students may apply and interview with a faculty member for an assistantship position which would begin in the spring semester. These positions are paid hourly and include research, teaching assistantships and administrative positions.
For student loans and how to apply visit Emory’s Office of Financial Aid website.