Citibank, the consumer and corporate banking arm of financial services giant Citigroup, terminated its loan program for graduate students at Harvard last week, according to University officials.
In 2003, under former University President Lawrence H. Summers, the University and Citibank inked a deal—now known as CitiAssist—to provide financial aid for many Harvard graduate schools, with both institutions sharing the financial risk. Three years later, Citibank agreed to underwrite all financial responsibility for the loans.
International graduate students are apt to be affected most by the change. CitiAssist allowed foreign students to borrow without a cosigner, while most similar programs require that a U.S. citizen or permanent resident cosign the loan.
Students who are U.S. citizens will be able to find alternative sources of funding more easily, such as the federal government’s direct loan program, said University spokesman John D. Longbrake.
The University was notified two days before the program was cancelled but obtained a short extension before Citibank permanently stopped accepting applications on Oct. 6, according to financial aid officers at the Harvard School of Public Health.
Citigroup representatives declined to comment yesterday, saying that the bank’s special arrangements with schools are confidential.
Citigroup lost its bid to merge with faltering bank Wachovia to Wells Fargo last week. The company will be one of the nine major banks to receive an injection of federal funds as part of the Bush administration’s $250-billion plan to rescue frozen credit markets.
Students who have already submitted applications to CitiAssist will not be affected this academic year. Citibank will continue to underwrite loans for students in coming years but no longer under the terms of the special arrangement with Harvard.
Longbrake said financial aid offices across the University will be working to find alternatives for affected students.
In an interview last week, HSPH Dean Barry R. Bloom said that fewer than half of the students at the school currently receive aid from HSPH funds and only 60 percent receive any aid from the University, a figure that includes the CitiAssist program.
The percentage of international students at the School of Public Health has increased from 20 percent to around 33 percent during Bloom’s tenure, he said.
“We have students from all over the world, an unbelievable student body,” Bloom said. “An awful lot of them are unable to pay for very much, and I just worry that not only they but many of our domestic students really are making great sacrifices to study here.”
Bloom added that his successor, former Mexican health minister Julio Frenk, who will take over the deanship in January, will have to increase the school’s fundraising efforts in the coming years to expand its financial aid program.
The School of Public Health’s director of student financial services, Kathryn L. Austin, echoed Bloom’s concerns. She said that Citibank’s decision did not come as a surprise, given the current economic situation.
“The potential is there that some students may not choose to enroll in the future,” Austin said.
Roughly 60 of the approximately 1,000 students enrolled at the School of Public Health applied for CitiAssist loans this year, Austin said. Nine of them are international students who will be returning next year.
The Harvard Kennedy School’s associate director of student financial services, Stephanie S. Streletz, said that she estimates 90 to 95 percent of the Kennedy School’s CitiAssist applicants were able to submit their applications before Citibank cut the program. Fourteen percent of Kennedy School students are enrolled in the CitiAssist program this year, Streletz also said. Other schools affected by the move include the Law School, the Business School, and the Graduate School of Arts and Sciences.
—Staff writer June Q. Wu can be reached at email@example.com.