PHOTO: ALEXANDER MILS / PEXELS
56 | THE PIE REVIEW | ISSUE #26
Accessing finance while
studying abroad is a
common worry for many
It’s easy to
notice the one
Ferrari or Mercedes
that’s parked in the
student parking lot Controversy around students being able to support them-selves
– which in many destinations is a visa requirement
for at least the first year of study – and suggestions these
requirements are being worked around have been featuring
in the media as of late in places such as Australia.
Across the Tasman Sea, New Zealand has clamped down
on what it calls “crowd-funding” for student visa applica-tions,
which is where prospective students list as many as
60 sources of funding from extended family members.
“For us that actually raises questions about whether there
are other risk factors there that might lead to those funds not
being genuinely available in New Zealand,” Immigration New
Zealand national manager for education and tourism Jeannie
Melville commented in the NZ Herald earlier this year.
A dependence on family for financing studying abroad
naturally has its downsides. Some people simply don’t have
family members willing or able to front the cash, or cultural
expectations prevent them from pursuing their genuine fields
of interest. There’s also the issue of which family members
are most likely to be the beneficiaries of relatives’ hard ear-ned
cash, particularly in developing nations.
“There’s a gender lens to it,” says Smadja bluntly. “What
we found when we did an impact analysis is that women in
emerging markets are more likely to be left behind.
“Typically, mum and dad save up or offer this opportu-nity
to the male of the house and not as much to the female
of the house. Especially if the female is the second or third
or fourth child, then there’s no more savings by the time it
gets round to her.”
“It’s easy to notice the one Ferrari or Mercedes that’s parked
in the student parking lot,” Smadja continues.
“What you don’t notice are the other 99 students who are
walking and scrambling to pay their bills. And those are just
the ones that made it. There are several hundreds of thou-sands
of students that weren’t able to show proof of funds
to get their I-20 and make it to the US, or who didn’t even
fathom coming because they could never afford it.”
There are currently over 1.6 million international students
enrolled in the US and Canada. IIE data suggests almost
60% of international graduate student funding in the US is
from family or personal funds, including loans.
Since launching MPOWER Financing, Smadja’s team has
issued over 3,400 loans to international students to study at
institutions across the US and Canada.
Also based in the US is Tahem Veer Verma, an internatio-nal
student who did his MBA at Cornell and, as an establis-hed
entrepreneur, has already launched and exited from his
first start-up, English language learning app Enguru.
Verma launched “challenger bank” North Loop in 2019,
which also offers a loan and refinancing scheme and an inte-resting
referral scheme whereby interest can be saved on the
loan, depending on how many friends are introduced.
Verma revealed in 2019, “We have over $2.5m in loans
already applied for and its growing pretty quickly.”
Proving they can support themselves financially is a hea-dache
for many international students, particularly those in
places where having a bank account is uncommon.