We recently received an email inquiring about the Affiliated Loan Program for International Students (or ALPS), what it is, and how it works?
Because of the current economic state, many private student loan lenders scaled back on overall student lending (including lending of student loans to international students). In fact, all traditional lenders pretty much eliminated the ability of international students to borrow student loans for college (without US credit-worthy co-signers)… and this is where the Affiliated Loan Program for Students (ALPS) comes into play.
ALPS delivers low-cost student loans (up to the total cost of education for international students) without requiring established credit or co-signers. Affiliated Loan Program for Students “leverages a participating school’s credit rating, not its cash, to meet a level of student financing needs that the school determines. Eligible schools incur no up-front expenses and do not need to commit to any minimum or maximum loan volume level.”
As the Affiliated Loan Program for Students grows, economies of scale have enabled a reduction in the Affiliated Loan Program for Students costs for international students. Another measure of the new financing model’s success is that investors have demonstrated a strong appetite for acquiring securities backed by ALPS loans.
Moehn Management provides program administration for ALPS. The group’s principal, Kevin Moehn, says that “as the program was being developed, business schools sought a reliable, long-term program that was not dependent on a single lender, would be of sufficient size to meet the total need, and would mitigate the school’s financial risk.” Accordingly, he says, dependable Affiliated Loan Program for Students partners were selected to deliver the ALPS program. Deutsche Bank is providing loan capital. The Access Group provides loan origination, servicing and collection support.”
According to data from GMAC’s 2008 Alumni Perspectives survey, more than a third of international students attending US schools reported using loans to meet the costs of their education. Moehn says the availability of resources through Affiliated Loan Program for Students (ALPS) can help business schools recruit and retain more college students.
Importantly, too, Moehn says, the program’s reach now extends beyond international business school students—foreign and domestic students at both the graduate and undergraduate levels are now eligible for Affiliated Loan Program for Students (ALPS). - www.gmac.com
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