Harvard Strikes Loan Deal

The University has inked a custom loan arrangement with financial services giant JPMorgan Chase designed to make it easier for international graduate students to fund their education, Harvard officials announced Friday.

The recently signed deal, which had been in the works for over six months and was conceived to replace a previous arrangement with Citibank, will provide eligible international students with loans up to the total cost of attendance at Harvard’s graduate schools.

Under the terms of the agreement, students will be allowed to borrow money for educational purposes without a co-signer, a requirement for most student loans.

The program is the first of its kind to be completed by JPMorgan, but the bank is currently discussing similar programs with several other universities to help students from overseas, according to Tom Kelly, a company spokesman.

Because they are ineligible for student aid from the U.S. government, international students have historically had difficulty finding suitable loan options.

The previous arrangement with Citibank, the consumer and corporate banking arm of Citigroup, contained a similar provision eliminating the need for co-signers, but Citibank terminated its agreement with Harvard in early October, citing the effects of the frozen credit markets.

International students typically have a higher probability of defaulting on their loans than American students, a Citibank spokesman said at the time of the arrangement’s cancellation. Citibank also broke off similar agreements with other schools this fall, including MIT and the University of Michigan.

JPMorgan declined to comment this weekend on the risk level assumed by offering educational loans to foreign students.

The abrupt termination of the Citibank program in October left Harvard administrators scrambling to find ways to maintain their commitment to financial aid across the University.

University President Drew G. Faust has repeatedly said that Harvard will sustain current levels of graduate student financial aid for the next year—a commitment that she has deemed one of the University’s top priorities—even at the expense of other programs in school operating budgets.

In the past year, the University has rolled out a series of financial aid expansions—including programs at the College, Harvard Law School, and Harvard Medical School—that University officials have hailed as representing a renewed commitment to meeting student need.

University officials said they will continue to explore additional financing programs for all students in order to increase the flexibility of loan options.

—Staff writer Athena Y. Jiang can be reached at ajiang@fas.harvard.edu.

—Staff writer June Q. Wu can be reached at junewu@fas.harvard.edu.