BEIRUT: The best things in life are free – except, perhaps, education. As students head into their final year of high school, not only must they contend with the toil of state exams, they must also contemplate and decide upon the path they wish to strike out on postgraduation. For many that path will lead through further education, a field dominated by private institutions, making it a path lined with bills.
Fortunately, for those most in need, financial assistance is available.
It is perhaps unsurprising that the most comprehensive financial aid programs are found at Lebanon’s top universities, and – as it happens – its most expensive. Annual tuition can run upward of $10,000.
At the American University of Beirut, the only Lebanese institution to feature in the QS World University Rankings 2013 – albeit in slot 250 – a range of financial assistance is offered, from needs-based grants and merit scholarships to a work study program.
The university’s financial aid fund has grown steadily over the past half decade – from just under $14 million in the academic year 2007/08 to more than $20 million in 2011/12.
Last academic year, 2,568 students, or 40 percent of AUB’s undergraduates, benefited from the university’s financial aid, receiving an average award of $7,456, according to information available on its website.
The website says almost 80 percent of all financial aid applicants, both undergraduate and postgraduate, received some degree of award. The needs-tested sums awarded ranged from a few hundred dollars to the full cost of tuition.
Recognizing that the financial aid award is not always sufficient for a student to cover his or her tuition, AUB became one of the pioneering universities to facilitate low-interest student loans.
Long before the Lebanese Central Bank’s 2009 initiative to incentivize commercial banks to offer education loans, AUB struck its own agreement with local banks and made U.S.-dollar loans an option for its students in 2003, explained Hanaa Kobeissi, associate director of financial aid at the university.
Initially only offered to students in the medical school, the loans are now granted across all six academic faculties at AUB and are available in Lebanese pounds under the terms of the Central Bank’s initiative.
While all students can apply independently to banks for loans to finance their education, Kobeissi said only those students who had received financial aid from the university could apply under AUB’s special agreements with a number of banks.
As part of its financial aid strategy, she said AUB aimed to keep the portion of tuition students borrow below 30 percent of their total fees in an effort to minimize student debt.
Similarly, AUB’s loan program is only offered to students in their second year and above. This, Kobeissi said, is to guard against first-year students accruing debt and then deciding not to continue studying. By the time a student embarks on their second year, the likelihood of dropping out significantly decreases, she explained.
Kobeissi also pointed out that there was an inverse relationship between the amount of financial aid AUB gives students and the size of the loan they are offered.
“The lower the need, the higher the loan,” she said.
Loans are optional, however. Only 10-12 percent of those eligible choose to go ahead with borrowing through AUB’s bank agreements, she said.
With AUB loans, the only cost to the student during the period of study and for a one-year grace period following graduation is the interest.
After that, students repay the full loan, plus interest, over a maximum period of 10 years.
Kobeissi said that since the loan program was launched there had never been “any problem with repayment,” aside from occasional late payments for a variety of reasons.
All student loans issued in line with the Central Bank’s guidelines are offered at 3 percent interest and are repayable over 10 years.
The Lebanese American University is the most expensive school in Lebanon, with the majority of its degree programs setting a student back at least $7,000 per semester.
Like AUB, LAU offers a raft of financial aid options including an incorporated loan system. However, those who qualify to benefit from LAU’s financial aid loans get a better deal than their counterparts at AUB – if they can repay the loan quickly.
“The university awards about $2.2 million in loans every year,” Ghada Abi Fares, director of LAU’s financial aid and scholarships office, told The Daily Star by email.
The loans are awarded as part of students’ financial aid packages, but unlike at AUB, first-year students are able to benefit.
Students who are awarded these loans can repay them interest free within three years of graduation. If the loan is not fully repaid within this grace period, students have 12 years (including the grace period) to pay off the loan and are charged 50 percent of the market interest rate.
Abi Fares said the loan portion of the financial aid package was “usually no more than 20 percent of tuition.”
However, such loans are offered to a must smaller proportion of the student body than at AUB. Approximately 25 percent of LAU’s students receive financial aid and can thus qualify for a loan, as opposed to 40 percent at AUB.
LAU also offers loans in conjunction with Byblos Bank, although only students enrolled in the School of Medicine and the six-year pharmacy degree program may benefit, Abi Fares said.
On these loans, “the university pays the interest ... on behalf of the students while they are enrolled,” she added, clarifying that students were not expected to pay this interest back to LAU at a later date.
At Universite St. Joseph, the country’s leading francophone third-level institution, financial assistance is provided through scholarships, needs-based aid and payment plans.
Students can pay their fees in up to ten installments over the course of the academic year, assistant manager of student social services Rosie Rami said by phone.
All students across all degree programs can take advantage of loans offered by USJ in conjunction with Byblos Bank, Bank Audi, BLF and BLC, Rami added. She said approximately 1,100 students benefit from such loans each year, out of a total student body of 12,000.
Unlike, LAU and AUB, who sometimes offer financial aid in the form having students work at the institution, USJ has no such work-study program, although there are employment opportunities for students on campus, Rami said.
At the University of Balamand, students must seek out bank loans independently, but Walid Moubayed, director of admissions and registration, pointed out that the university does support “students who are benefiting from educational loans by granting them financial aid, if eligible.”
This support may cover the interest repayments on the loan, he added.
Many less costly universities also have some degree of financial assistance in place.
At the Arab Open University – where head of student affairs Rana Haidar says the cost of one credit does not exceed $66 – needs-based aid, merit scholarships, work-study programs and payment plans are offered. Some 25 percent of its student body benefits from this help, Haidar said.
She describes the payment plans as “equivalent to loans in some ways.” Payment plans allow students to pay their fees in multiple installments or over an extended period of time.
But first-year students should beware: at many institutions financial aid only becomes accessible after the completion of one academic year or a decreed number of credits.
For example, the Holy Spirit University of Kaslik only grants first-year student assistance in very exceptional circumstances, its website says. At the Middle East University students need to have completed at least 12 credits to be eligible for a tuition discount.
It is also noteworthy that most institutions tie the continuation of financial assistance to the maintenance of a good academic standing.