Black MBA - Summer 2008 - (Page 52)

EDUCATION Value of the MBA Invest in Your MBA Despite Signs of Recession, Finding Financing for Your MBA is Easier than You Think By D. Kevin McNeir WITH U.S. CITIZENS reeling from a record-number of mortgage foreclosures, unimaginably high and still rising gasoline prices and food costs, it stands to reason that the recent news that Sallie Mae may soon be forced to halt student loans has driven yet another nail in the coffin for college-bound students and their parents. In fact, financial experts predict that unless elected officials on Capitol Hill approve government intervention or a rapid improvement in market conditions occurs, Sallie Mae, the nation’s largest student lender, and smaller lenders may have no choice but to stop writing new federally-backed loans. But before those of you who are considering making an investment in your education and life by earning an MBA yield to the notion that “the sky is falling,” financial aid and admissions leaders from several of the country’s top universities say that with sound planning, the MBA still remains a solid investment. In other words, “don’t believe the hype”… at least not yet. NO NEED TO PANIC Kevin Bruns, executive director of America’s Student Loan Providers, leads a coalition whose purpose is to represent the voice of the student loan community on common issues. His members consist primarily of lenders and guarantee agencies that provide federal student loans, and he says that many people are simply unaware that when it comes to financing one’s education, there are several different markets and a variety of loans worth considering. “Before people panic, they need to realize that all loans are not the same,” he 52 BlackMBA • Summer 2008 • www.nbmbaa.org “When you look at the kind of money that can be made within the first several years of graduation, going after the MBA still makes sense.” –Susan Gilbert, Harvard Business School explains. “We are talking about two different markets here – private loans without federal guarantee that have grown every year as costs have risen, and then federal loans. The private loans have already been hit by the credit turmoil and they’ve been hit the hardest. But then all asset-based securities, credit cards and automobile, home and student loans have been affected. And because subprime student loans, those with lower credit scores, have shown an increase in defaults, the whole secondary market that funded these loans has also been negatively impacted. What this all basically means is that students with a bad credit history may find it difficult to get approval for a private loan unless they can find a co-signer.” But with recent announcements that many lenders are pulling out of the “money-losing” student loan arena, shouldn’t potential students be concerned? Bruns says he doesn’t believe it is time for students to panic. Instead, they need to make sure they are in constant communication with their college’s financial aid office. “Financial aid officers are intent on helping students enroll and then finish, so the more information one has, the less anxious they need to be,” he says. “On the federal side, we have seen no evidence that students are being denied loans, but then we are at the end of the academic year so we cannot really anticipate the future. Close to $50 billion will be applied for in the next three months and, right now, there simply isn’t enough capital among lenders in the system to serve that. I anticipate that the United States Department of Education will buy old loans so that capital can be made available for the purchase of new loans – that will enable lenders to http://www.nbmbaa.org

Table of Contents Feed for the Digital Edition of Black MBA - Summer 2008

Black MBA- Summer 2008 Contents Mailbag Up Front From the President & CEO Politics of Change Catalyst for Change: Results of our 2008 Political Poll Know Whose Shoulders You Stand On: The Legacy of H. Naylor Fitzhugh Howard University: Changing With the Times Straight Talk: CEO to CEO Creating Your Own Sandbox Dual Threats Avoiding the Faux Pa Invest in Your MBA Everything You Need to Know About...Estate Planning On Campus Plan Ahead The Big Show What's in a Name? On the Move Market Forecast Jeff Friday Keith Wyche Life Lessons On the Ground Real Biz A Golden Opportunity Entrepreneurial Institute Tech Tools Read for Success Stacey Tisdale Advertiser Index

Black MBA - Summer 2008

For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.