Postgraduates who took out loans with Sallie Mae, the big American company, are to be left in the lurch because the corporation has withdrawn from the British market, owing to the credit crunch. This is a serious blow to large numbers of students who were hoping to fund the remainder of their programmes with borrowed money. It has certainly been a shock to the doctoral student Victor Schonfeld, who tells the story of how he discovered the story of his vanishing loan purely by accident, and will almost certainly have to abandon his degree as a result. The failure to inform students of Sallie Mae's decision to pull out of Britain is one of the most deplorable aspects of the affair. Royal Holloway, Schonfeld's university, said it had other, more important matters, on its mind; Sallie Mae says it was told it didn't need to. Whatever the reason, one would have thought both the university and Sallie Mae had a moral, if not a legal duty, to tell students that their precious source of funding was to dry up.
Postgraduates have had a hard time finding the money to undertake their degrees. There has been some money available in the shape of career development loans, but these were for vocational courses lasting no more than two years and were limited to £8,000; grants from the research councils are in short supply and focused on a handful of candidates. The banks would lend money but only to very good bets like medics and law students. So, when Sallie Mae announced a year ago that it was going to be offering loans to the growing army of postgraduates in Britain, everyone jumped for joy. It seems that 700 students piled in to take out loans – and many of those would have been expecting to borrow another tranche to take them through next year, and even a year or two after that. Now they will either have to give up their studies, like Schonfeld, or cast around for other options.
But for some students, particularly those on high-fee Masters courses offered by institutions such as the London School of Economics, this will be difficult. Postgraduates were able to borrow up to £20,000 a year with Sallie Mae to fund degrees with high price-tags. In future it is going to be much harder for those taking arts and humanities degrees to obtain funding for their studies.Reuse content