Harvard’s New Preferred-Lender Program Leaves International Students Facing Uneven Loan Caps

Harvard’s new preferred-lender program gives domestic graduate students across the University access to loans up to their full cost of attendance, but leaves international students facing sharply different borrowing limits depending on which school they attend.

The disparities are stark. International students at Harvard Law School, Harvard Medical School and Harvard Business School can borrow up to the full cost of attendance from the Harvard Federal Credit Union, one of the University’s two preferred lenders.

But at the Harvard Graduate School of Design — where the standard annual cost of attendance is more than $104,000 — international students can borrow no more than $15,000 from HFCU or CollegeAve, the University’s other preferred lender. At the Harvard Graduate School of Education, where the annual cost of attendance for international students is roughly $106,000, loans are capped at $26,000.

The University established the preferred-lender system as the One Big Beautiful Bill eliminated federal Grad PLUS loans for most students beginning new graduate programs after beginning July 1, cutting off a major source of financing for graduate and professional students.

Grad PLUS had allowed eligible domestic students to borrow up to the cost of attendance, minus other financial aid. International students were not eligible for the program.

Under the new limits, students in qualifying professional programs — including law, medicine, and dentistry — can borrow up to $50,000 annually, while other graduate students are capped at $20,500. Alongside limited institutional financial aid offerings at some graduate schools, those limits can leave students short of Harvard’s tuition and living costs, forcing them to turn to outside lenders.

Harvard previously published a neutral list of lenders students had used. For the 2026-27 academic year, the University has taken a more active approach, selecting College Ave and HCFU as “favorable” lenders after evaluating proposals from 22 companies.

In a July 23 interview with former Harvard Corporation fellow and Carlyle Group co-founder David Rubenstein at the Economic Club of Washington, D.C., University President Alan M. Garber ’76 praised Harvard’s ability to support graduate students amid the federal changes.

“The federal government has greatly reduced Grad PLUS loans, and that means there’s really not adequate funding for students pursuing graduate degrees anymore,” Garber said. “For most students, we were able to put together our own loan program for students to make up for that. There, having our financial resources really matters.”

But the reach of that program varies considerably across schools.

CollegeAve, a private student loan company, allows all domestic students in most graduate programs to borrow up to their school-approved cost of attendance. HFCU, a not-for-profit credit union that serves Harvard affiliates, offers full cost-of-attendance coverage to domestic and international students at HBS, HLS, and HMS, but imposes lower limits at other schools.

Harvard’s central lender page lists Harvard School of Dental Medicine students as eligible to borrow up to their school-approved cost of attendance, though HFCU does not publish a numerical limit and directs students to HSDM’s financial aid office. The Harvard Divinity School is excluded from HFCU borrowing entirely.

For international students, those limits sometimes increase with a U.S. cosigner. Under HFCU, at the Harvard Kennedy School, the cap nearly doubles from $20,500 to $50,000 — while the cap at the Harvard School of Public Health increases from $35,000 to $50,000.

Mark Kantrowitz, a higher education finance analyst, said domestic lenders tend to consider loans to international students as riskier, explaining why their borrowing caps may be lower.

“International students tend to be higher risk for U.S. based lenders,” Kantrowitz said. “Because the students might go home, and the lender may have more difficulty collecting the debt from an international student who’s in a different country than they would for a U.S. student who is in the U.S.”

Harvard’s selection criteria called for lenders to offer loans to domestic and international students, including international borrowers without U.S. cosigners. The University also prioritized fixed interest rates that would not vary based on credit history.

Of the 22 lenders that submitted proposals, only College Ave and HFCU offered what Harvard described as a “competitive interest rate” to all students without regard to creditworthiness, according to a University evaluation document.

The University also wrote in the document that it was willing to consider risk-sharing with private lenders — arrangements under which Harvard and the lenders would both share financial responsibility for the loans and the risk of default.

University spokesperson Jason A. Newton declined to comment on the discrepancies in borrowing limits or say whether the University entered into a risk-sharing agreement with either lender.

Both HFCU and CollegeAve offer interest rates lower than the federal rates available to graduate students this year, without the origination fees charged on federal loans. Alternatives. Kantrowitz said offering two lenders gives students some choice while allowing Harvard to negotiate standardized terms.

“They don’t want it to just be one lender, so they want to provide a choice,” Kantrowitz said. “Some people might just choose a credit union because they think more highly of credit unions than private lenders. Some will focus solely on the fact that the interest rates and fees are lower.”

Harvard’s approach is more centralized than those of several peer institutions.

For instance, Yale University highlights a single private alternative — whose rates vary — and states that it does not endorse or recommend lenders. The University of Pennsylvania, Cornell University and Georgetown University each list at least five preferred private-loan programs.

Other institutions — such as MIT, Stanford University, and Princeton University — only offer a historical list of private lenders that students have used.

University of Cambridge economics professor Constantine N. Yannelis wrote that other universities “retain a broader menu” of borrowing options and “emphasize comparison among products.”

“Harvard is in line with its peers in responding to the new federal caps, but its approach is relatively interventionist and centralized,” he wrote.

Harvard still maintains a list of 40 “neutral lenders” that have provided loans to Harvard students over the past three years.

University of Tennessee higher education finance professor Robert Kelchen wrote that a key distinction between federal and private lenders is that private lenders are. not eligible for income-driven repayment plans.

Separately, Kelchen wrote, the disparities in caps across graduate programs likely reflect students’ expected earnings post-graduation.

“Private lenders have to try to get a return on their investment, unlike the federal government (which is willing to pool risks across majors),” Kelchen wrote.

Seema Joshi, an incoming international student at the Harvard Kennedy School, said she took loans from both HFCU and College Ave because of the loan caps and her lack of a U.S. cosigner.

“I do not have much clarity in terms of how the systems work, so I am trusting that Harvard would have done the required negotiations or whatever would be required, and ensure that the students coming over have a good deal,” she said.

For some students, the borrowing caps led them to look beyond Harvard’s preferred options.

Alannah Forman, an incoming graduate student at HGSE, said she opted for other private lenders due to HFCU’s cap.

“It’s contradictory to everything that I’ve ever heard before grad school, but the private market actually had better rates for the first time I’ve ever seen, which is really shocking because you’d want the support system,” Forman said.

Despite the financial strain of combining together private loans and scholarships to cover the remaining cost, some students said attending Harvard was worth the uncertainty.

“Deferring for me feels like I didn’t work hard enough to make it happen because I know that there are other ways,” incoming HGSE student Shandrea Wing said.

“It’s Harvard, right?” Wing added. “Who wants to give up Harvard?”

—Staff writer Shawn A. Boehmer can be reached at [email protected] and on Signal at shawnb.18. Follow him on X @ShawnBoehmer.

—Staff writer Uy B. Pham can be reached at [email protected] or on Signal at ubp.88. Follow him on X @uybpham.