The Credit Crisis at HBS

As jarring and troubling as the news has been for all of us here at HBS, for international students, the perspective is peppered with shifting expectations, challenged perceptions of America, and personal worries as the tightening of the credit markets leave many students wondering how they’ll finance the balance of their education.

The unfolding of the current financial crisis has all of us glued to our televisions, blackberries and newspapers as we try to adjust our career choices, goals and lives in general. It seems as if every day there is more news accumulating: another firm down, another horrible day in the market, increasing talk of the global repercussions of America’s mistakes.

On many people’s minds is the change in CitiAssist loan products, and the effect it will have on international student presence. An initial email from financial aid, which detailed Citi’s new requirement of a U.S. co-signer for international students, caused ripples of concern throughout the community. However, students now feel much more assured that HBS will work to find a solution. Max Reichel is “confident that Harvard will figure something out for the next year, given the financial strength of the institution and the promise they make to international students.” His views represent the general sentiment on campus: many believe if HBS were to lose international students to financial concerns, the reputation and character of the school would be forever tarnished.

But private loans aside, the ability to finance two expensive years here has many students on edge. Some students are essentially shorting the U.S. dollar in an effort to make HBS more affordable. Rie Yano, a Japanese RC student, has been converting her yens to dollars due to the relative strength of her country’s currency. However, she still worries that she “has no idea how I’m going to finance my EC year”.

Adam Taylor converted all of his life savings from British Pounds to dollars in May, anticipating the volatility of American currency. But he still thinks about how fortunate of a choice he made. “If I’d converted all my British Pounds to dollars at today’s prices my MBA would have been 25% more expensive. Imagine if everyone’s savings went down 25%”. He plans on taking out additional loans in U.S. dollars, then returning to the U.K. to work after school.

The job market has all of us sitting tight. We wonder what the prospects for summer internships will be, and what the implications are for full-time employment once our two years here are done. Fabrice Lesaffre, who came to HBS from France, used to think that working in the US post- business school was the safest and most lucrative option, albeit unexciting. The crisis has changed his mind; he now thinks, “working outside the U.S. definitely offers more financial and career opportunities.” He also expresses pity for U.S. students who cannot or will not work outside of this country.

Other students wonder how permanent of a change the perceived shift in career opportunities really is, and are thankful for the benefit global firms present in today’s environment. Tarek Saghir, a JD/MBA from Toronto, Canada, says, “the current situation makes me appreciate the importance of being able to work in other countries that are less impacted by the financial crisis. It seems that increasingly you can work for a single employer in multiple geographies, and that having these other options acts like insurance during rough times.” Numerous international students expressed this sentiment, with preferences for client services firms with an international presence reiterated as a secure option for career growth.

But there is also the idea that the current financial state, though global in scope, has made the oft-difficult decision of working here in the States or returning back to one’s home country a bit easier. The America of the last couple of months of headlines is a different picture than the world has known throughout most of recent memory. Farai Shonhiwa is a South African citizen who is living in the U.S. for the first time, and sums up her experience with a simple idiom. “[The financial crisis] underscores the point that all that glitters is not gold.” It also makes the pull between home and here a clearer choice in some instances. Shonhiwa speaks about the particular benefit that some emerging markets are expected to reap as a result of all of this. “For many people who come here for school from Africa there is a measure of internal tension around pursuing career opportunities in an economy as developed as that of the US vs. going back home . . . the relatively low correlation between African markets– excluding South Africa– and major global markets, coupled with the accelerating pace of development in many parts of the continent make career opportunities in Africa increasingly attractive.”Wherever the ups and downs of the financial crisis may take us, it is important to recognize the diversity of experience and effect that are present throughout our community. The challenges will surely continue, but the will to navigate them will persevere. To be sure, the crisis has presented a new lens to explore personal, educational and career choices, and like most of the students mentioned during the course of this article, what better place to be experiencing it all?

November 3, 2008
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