On Tuesday The University of Pennsylvania’s Wharton School announced a new student loan program for international students that will not require borrowers to have U.S. co-signers. The program, launched in partnership with Digital Federal Credit Union, is the long-awaited replacement that the school has been searching for since Citi canceled its program last October.
The new loan program will cover tuition and living expenses for Wharton’s international students who can’t find U.S.-based co-signers. The loan terms are pretty good: an interest rate of Prime plus 3% (reduced by 25 basis points if the borrower signs up for an automatic payment plan), plus no origination fee. Wharton will share some of the risk of default with DFCU, which indicates how badly Wharton wanted to make this new loan program happen.
Wharton’s financial aid office is currently reviewing several proposals for new loan programs for domestic students and for international students with U.S.-based co-signers. The school expects to have a list of approved lenders for both federal and private loan programs within the next few weeks. The “international with no U.S. co-signer” group was the most in need of help (some of them were even turning down schools of Wharton’s caliber, in part because of financing challenges), so it’s good to see Wharton get that one out of the way first.