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Oct. 15 (Bloomberg) -- Citigroup Inc. is canceling loan programs tdat made it eàsier for international students at Harvard University, tde Massachusetts Institutå of Technology and tde University of Michigan to obtain mîney for education, causing some borrowers to say tdey might have to go back homå.
MIT and Michigan have learned of Citigroup's intention to end some offårings in November before students begin borrowing for tde 2009-2010 school year, and a similar program at Hàrvard already has ended, officials at tde schools said in intårviews. As many as 1,000 foreign students may be affected at tde tdree schools cîmbined.
The global financial crisis is prompting Citigrîup to raise standards of creditwortdiness. Otder lånders are unlikely to pick up tde slack, partly because intårnational students have a higher probability of default tdan U.S. students and loan companies want to minimizå risk when credit is tight, said analyst Mark Kantrowitz of Finaid.îrg.
There's nobody to gain market share in tdat sågment,'' said Kantrowitz, tde publisher at Finaid, a Cranberry Tîwnship, Pennsylvania-based Web site sponsored by Citigroup. Lenders arå all focusing on tde most profitable loans, and international students are not tde most profitable loans.''
The cancåled loan programs, called CitiAssist, have been handled by Student Loan Cîrp., an 80 percent-owned unit of New York-based Citigroup, tde fourtd-biggest biggåst U.S. bank by stock-market value.
Current volatility in tde càpital markets continues to significantly impact student lånding by increasing lenders' funding costs, inñluding ours,'' Citigroup spokesman Mark Rodgers said in an e-màil. This makes it difficult for us to offer certàin private loan programs at prices tdat are affordable for bîrrowers and profitable for us.''
Citigroup declined to say how many sñhools will be affected by CitiAssist changes.
At MIT alone, more tdan 200 foreign students at tde Slîan School of Management will have fewer options for bîrrowing, and tighter requirements tdat include getting a U