This piece is part of our ongoing reporting on financial aid. You can also read a report about transparency and communication in financial aid, our series of financial aid-focused student profiles, our analysis of a student survey about financial aid, and our reports on the financial aid Day of Action and subsequent town hall.

Minerva students come from, study in, and will build careers in a vast array of countries. Within this international student body, there is immense variation between families’ ability to pay for college and their expectations for how much they should struggle to do so. 

When providing financial aid, Minerva’s stated goal is to minimize these differences so that all students have their demonstrated financial need met “no matter who you are or what country you are from.” Yet the process of meeting this goal in a way that both Minerva and students find fair is often difficult. 

This article examines how cultural and individual backgrounds influence the financial aid process in three ways: the financial need of families, assumptions about what is fair when paying for college, and a student’s willingness to take out Minerva’s student loans.

Evaluating Financial Need for a Global Student Body

Minerva’s financial aid application is intended to equally accommodate international and US students. All students complete the College Board’s CSS profile, fill out Minerva’s own financial questionnaire, and submit documents confirming their family’s financial circumstances and ability to pay for Minerva. 

Accounting for Cultural and Individual Differences

Several international students told the Quest about inconveniences they experienced while filling out the financial aid application, though most said the financial aid team worked with them to resolve issues. One such student was Ibukunoluwa Aribilola, an M’22 from Nigeria, who told the Quest her country’s tax schedules don’t match Minerva’s financial aid timeline. Aribilola said that while the application process is long and communication with the financial aid team is sometimes delayed, she has managed and her financial aid package was not negatively impacted. Giovanna Chaves, an M’20 from Brazil, similarly told the Quest that she struggled to accurately convey her family’s financial situation because mortgages are not common in her home country. After Chaves reached out to the financial aid office, however, she received help with completing her application.

Melissa Morgenstern, Minerva’s Student Accounts Manager and the administrator most directly responsible for financial aid, told the Quest in a previous interview that “at the end of the day most tools in the US [like the CSS profile] are made for a US audience.” For example, they operate in English, disburse funds in US dollars, and are based on US college admissions and tax schedules. This reality highlights the importance of augmenting them with Minerva’s own questionnaire. Morgenstern described Minerva’s internal financial aid tools as a means for ensuring consistency of financial aid evaluations across different countries and allowing students to better explain their personal situation. 

One example Morgenstern described was evaluating a family’s illiquid property. In the US, she would expect the family to know the exact price of the house and the debt on it. If a family owns a house in Eastern Europe, however, calculating these exact figures may be more difficult because “in many countries that were part of the Soviet Union, property was just given to people.”

“At the end of the day most tools in the US [like the CSS profile] are made for a US audience.”

Melissa Morgenstern, Minerva’s Student Accounts Manager

The country students come from can also directly influence the costs students need to pay while at Minerva. Visa fees and the amount of time required to apply varies by nationality. One student from Pakistan wrote in the Quest’s anonymous survey, not directly covering visa fees in financial aid packages “directly discriminates against low-income students who come from countries with unprivileged passports and often have to pay a large visa fee.” As an example of visa expenses that vary by nationality, an anonymous M’19 student from Asia was required to have a significant amount of money in her bank account to receive one rotation country visa. But she barely had half of the required amount saved, so she had to study off rotation instead.

Asked whether Minerva adjusts family contributions to account for large, mostly fixed expenses like visa fees, Ben Nelson told the Quest that “we take into account a family’s available income which takes into account various expenses.”

A more subtle factor is that students often benefit from decreased flight costs if their rotation city is close to home, and also save on paying for Minerva health insurance for a semester if they are covered by their family’s plan in the rotation city. As Izzy Rousmaniere (M’20) pointed out in her Capstone, the increased costs of studying further from home are borne disproportionately by students who are from the African continent and other regions far from every rotation city and disadvantaged by global power relations. 

Morgenstern also pointed out that Minerva’s financial aid system has to account for individual differences, regardless of a student’s home country. If a student is estranged from one or both of their parents, for instance, they would have to prove that in their application and explain how their financial situation is impacted. Antonia Boorman (M’20) is one such student who described to the Quest how difficult it was to prove in each financial aid application that she only received financial support from one parent. “I had to [establish] that every single year, which was traumatic in itself,” she said. “But [it is] also just a very difficult process because how do you prove that you don’t talk to somebody?”

Currency Devaluation

Several students told the Quest they have struggled to pay bills in US dollars because of shifting exchange rates. Giovanna Chaves (M’20), told the Quest that because of currency devaluation in Brazil, her home country, her first-year term bill from 2016 would cost almost twice as much Brazilian reals if she had to pay it in 2020. On an even shorter time scale, Chaves said that the exchange rate between the Brazilian real and the US dollar may change dramatically between February, when financial aid applications are due, and November, when spring term bills are due — as it did in 2020 due to the coronavirus pandemic. 

One of the financial aid Day of Action demands was that students receive “an expected family contribution in both USD and the student’s home currency, so that currency devaluations don’t impede a student’s ability to pursue their education.” The Minerva senior team’s response to this demand acknowledged the risk of currency fluctuation but concluded that “We cannot assume all of the risk and shield students and parents entirely from currency fluctuations as this would make financial planning and budgeting unduly hard and more expensive.” 

If their currency devalues, therefore, a Minerva student may be left with term bills that are increasingly hard to pay. A student from Mexico, for example, wrote in the Quest’s anonymous survey that they believe their financial aid for the 2020-2021 academic year is unfair because their total aid amount decreased despite their family’s financial situation worsening due to increased living costs and currency devaluation. A student from Brazil was similarly frustrated that their family contribution increased even though “my family’s financial condition was the same as the previous year and on top of everything our currency is so drastically devalued.” Both students said they appealed their financial aid packages, but had yet to hear back from Minerva when they completed the survey in April. 

A student from Malaysia wrote in the survey that they had requested an increase in financial aid because they were struggling to pay term bills due to unfavorable exchange rates and a lack of liquid assets. According to this student, Minerva denied the request.

Despite Minerva’s promises and efforts to ensure family contributions are “both fair and sustainable,” the complexities of serving a global student body using a US-centric system make it difficult to fully anticipate and meet a family’s financial need. When currencies shift or a family’s actual financial assets fall short of what is reflected in official documents, students are often left to fill in the gaps on their own. 

Model: Austėja Ema Bazaraitė | Art by Emma Stiefel

Cultural Expectations of Paying for College

In addition to shaping a family’s ability to pay, students’ cultural backgrounds can influence their expectations of what is normal and fair when paying for college. As a result, even students with similar financial need may come to opposite conclusions about whether their family contribution is fair.

Saving for College

A student’s culture can influence how much their family is willing to save and sacrifice for their education. An anonymous M’21 student from East Asia who has never applied for financial aid explained to the Quest that her family had spent years saving money to support her education. They could afford to send her to Minerva but would never consider accumulating debt or taking on other financial difficulties to send her to a more expensive school. 

“[Throughout my childhood], I would go to the best school that we could afford,” this student said. “When I heard Minerva talks about how some people’s families sold their furniture just to send them to a really prestigious school I thought it was mind-blowing.”

Another anonymous student who filled out the Quest’s financial aid survey wrote that their parents did not save for their education because they come from a country where education is free. They had to take out additional loans in order to afford each term bill, but they thought their expected family contribution “would be appropriate” if they had come from a place where college savings accounts are the norm.

“[Throughout my childhood], I would go to the best school that we could afford.”

Anonymous M’21 student from East Asia

Many other students had the alternative of attending college for much less or for free but chose Minerva because they believed in the value of the model and/or wanted to study outside of their home country. The anonymous M’21 student from East Asia was paying less than $1,000 USD in annual tuition at a local college before they decided to pay Minerva’s ~$30,000 yearly cost in full because they wanted to attend a US college. Others, like an anonymous M’20 student from Europe, could have attended college at home for free. Some, including Kristin Hudson (M’20) and an anonymous M’21 student from Europe, gave up full scholarships at other US colleges to attend Minerva. 

On the other hand, Minerva was the least expensive college for some students. This group includes Aribilola and Boorman, who both had more positive evaluations of the college’s financial aid system. 

Student vs. Institutional Responsibility

Another dimension of expectations about paying for college is how responsibility should be distributed between students and Minerva. Is the institution responsible for taking on additional financial risks and securing more funding to support students, or is it fair for families to take on additional burdens instead? 

The anonymous M’20 from Europe, who could have attended a local college for free, felt that she had been taken advantage of by the school’s financial policies and promises of affordability. Though she enjoyed the other aspects of Minerva, she advised students with a similar financial background to not enroll. This M’20 student’s evaluation of Minerva’s financial aid system was partially influenced by what she described as European expectations of consumer protection. She was especially disappointed by Minerva’s Manifest refund policy for M’20 students, which only gave money back to students with financial aid if their scholarship was less than the refund amount.

“Minerva gave me the best they could. I really can’t imagine getting more money. Although even the amount I had to pay would sometimes be a scary sum.”

Anonymous Minerva Student

“It feels very wrong, and it’s something that wouldn’t happen in Europe,” this student said. “We have a certain expectation that when you pay for a service and you can’t get the service, you get the money back. It feels like we’ve been robbed.” 

Other students, however, told the Quest they were grateful for Minerva’s financial aid even though they work hard and sometimes struggle to afford to attend. Aribilola told the Quest that Minerva’s financial aid has been helpful as she budgets her work-study income and works summer jobs to save for term bills and flights. Boorman was grateful to receive any financial aid from Minerva because, as she told the Quest, “we don’t really have the right to ask for money from them.” A student similarly wrote in the Quest’s anonymous survey that “Minerva gave me the best they could. I really can’t imagine getting more money. Although even the amount I had to pay would sometimes be a scary sum.”

For these students, it’s fair for the burden of attending Minerva to rest, even uncomfortably, on the backs of them and their families. Others who are more disillusioned with financial aid, however, believe that Minerva has not lived up to their promise to lighten and share that burden. 

Model: Trang Thuy Tran | Art by Emma Stiefel

Is it Fair to Count Loans as Financial Aid?

Student debt is an infamously large and entrenched crisis in the US, especially compared to many countries where college tuition is much lower and/or covered by the government. The staggering costs and subsequent student debt burden is one of the many problematic aspects of mainstream US universities Minerva was intended to subvert. The Minerva website tells prospective students that “by keeping the cost of your education as low as possible, we help ensure you do not graduate saddled with debt.” Descriptions of the loans offered as part of Minerva’s financial aid package emphasize that they are “low-interest” and “not exceeding $22,000 across all four years.” The maximum debt amount was $20,000 until this spring, when it was increased by $2,000 to account for increased fourth-year loans for M’21 students.

Climb Loans: Minerva’s Student Loans

Minerva Schools sources student loans from Climb Credit, a US-based loan provider founded in 2014. Climb differentiates itself from other loan providers by only working with students attending programs it has deemed educationally valuable — “offering the knowledge and skills required for jobs with strong earning potential in today’s economy.” According to a 2019 Reuters article, Climb “lends $10,000 on average at an average rate of between 8.5 percent and 9 percent.”

Minerva students pay a fixed 6.5 percent interest rate on Climb loans, the lowest rate offered by the provider. Students who enrolled in 2017 or later typically took out loans of $4,950 per year (pg. 4), whereas M’19 and M’20 students apparently took out $2,960 per year (pg. 4), though for M’20 loans were $4,950 in their fourth year. All students must pay interest on each of their loans while they are in college, which was about $28/month for 2019-2020 academic year loans (pg. 4). After they graduate, students must make principal and interest payments of about $139/month on each loan for 2019-2020 academic year loans and should therefore pay off their debt in three and a half years (pg. 4).

Total loan amounts for Minerva cohorts over time. Loan increases for M’20 and M’21 are highlighted. M’23 and M’24 students took out one $9,900 loan that covers the 2020-21 and 2021-22 academic years. Source: Climb Credit Loan Library on the Hub (link accessible with minerva.kgi.edu email)

In their initial response to the financial aid Day of Action, Minerva’s Senior Team justified these loans as part of every student’s responsibility to fund their own education. They wrote that “the first $10,000 of a student’s annual cost is borne by the student who benefits from financial aid at Minerva, either through loans (that are heavily subsidized by Minerva) or through work-study opportunities (again heavily subsidized by Minerva).” 

Asked about how Minerva subsidized Climb loans, Nikolaus Pelka, Minerva’s Chief Financial Officer, told the Quest that Minerva Schools only receives a portion of the loan amount from Climb immediately; the rest is given to the school as the student pays off their debt. While Minerva expects all students to successfully pay off their debt, Pelka said “that delay in funds coming to Minerva creates real costs for the school.” While Pelka said that Minerva’s contract with Climb prevents him from disclosing further details, he told the Quest that “the part [of the loan amount] we have to wait for until the students repay the loan is very substantial” and confirmed that Minerva does not receive any interest while waiting to receive the funds.

Furthermore, Climb’s public-facing FAQ page states that “foreign citizens” can only apply if they have a co-borrower who is a US citizen or permanent resident. Given that the majority of Minerva students are not US citizens but receive Climb loans without a US co-borrower, it would appear that Minerva has also negotiated an exception to this rule. Pelka did not mention this when asked about how Minerva subsidizes Climb loans, however. Minerva’s “Anti-Racist Action Plan”, which Ben Nelson emailed to students on September 18, also mentions that Pelka is working with Climb “to negotiate a loan payback that starts later than in the first year.” No further details about these negotiations were included. 

The financial risk Minerva takes on to help students secure Climb loans isn’t widely known by the student body, however, and does not change the amounts students need to repay. Frustrations about the Climb loans included as part of Minerva’s financial aid packages came up time and time again in our reporting on financial aid. Multiple students have told the Quest through interviews or our financial aid survey that they disagreed with loans being counted as financial aid in the first place. Phoebe Meixner, an M’20 from the US, told the Quest that loans are “fake financial aid” and was concerned that Minerva’s terminology makes them seem equivalent to scholarships.

Taking on US Student Loan Debt as an International Student

Another student wrote in our anonymous financial aid survey that they “feel sad that loans and their repayments are all the same for all the students regardless of future job prospects, country of future work/living, and family abilities.” For many Minerva students, paying back over $20,000 USD would be extremely difficult if they were to return to their home country after college. Chaves told the Quest that “I know that right now working in Brazil is not going [to allow me] to pay back all my loans. Working in the US might, if I save enough money.” 

An anonymous M’21 student from Europe told the Quest that his middle-class family’s annual income is about $5,000 USD, almost the same amount as one $4,950 Climb loan. If this student took out all four Climb loans, neglecting the fourth-year loan amount increase for M’21 students, and made the minimum payments on each, he would owe $556 per month (four principal payments of $139 and interest payments) after he graduates. If he returned home after graduation and found a middle-class job in their country’s capital, he would have to devote all of his monthly salary to paying off his debt and would still fall over $100 short. Aware of the impossibility of such a situation, this student said that after graduation he needs to take the best-paying job he can find in the US. For the first several years of his professional life, he plans to prioritize paying off his debt over his career goals.

For the anonymous M’19 student from Asia, applying for a US work visa, and the potential  of getting rejected, was too much of a financial risk. If her application wasn’t successful and she lost her ability to work in the US, she had “no safety net” to fall back on. Instead, she decided her best option was to attend graduate school on a generous grant that would allow her to pay off her debt. While she was able to find a program that fit her needs, she was disappointed that her post-Minerva plans were constrained by her loan debt. 

“I feel sad that loans and their repayments are all the same for all the students regardless of future job prospects, country of future work/living, and family abilities.”

Anonymous Minerva Student

The many Minerva students with a similar financial background will graduate with not just ~$20,000 in debt but also the burden of securing both high-paying employment and a work visa in a wealthy country. A competitive job market and the uncertainty of securing a US OPT visa or similar work permit, two challenges that have only been exacerbated by the coronavirus pandemic, make this an exceptionally difficult prospect. 

Asked about this issue, Nelson told the Quest that “From the students who have graduated from Minerva we haven’t seen any correlation between country of origin and their earning potential post Minerva.” He argued that adjusting loans depending on how burdensome it would be for a student to pay them back is difficult because there is no way to anticipate what students do post-graduation when they enroll. 

Hypothetically, Nelson said, Minerva could switch to an income share agreement. Yet he concluded that because this scenario creates a greater risk of graduates not being able to pay back the full amount they received to attend college, interest rates must be raised for those who can repay the loans, and eventually students who go into high-paying professions opt-out and “the system collapses.” 

While Minerva is still exploring the potential of income share agreements, for now they are committed to providing Climb loans. But, Nelson added, Minerva “allows (and encourages) any student to opt out of our loans if they can find an external source of financing that is better. We lose money on every loan that is issued under the current mechanism.”

Alternatives to Climb Loans

Aware of the consequences of taking out student loans, some families have done their best to pay for all costs upfront. This was the case for the anonymous M’20 student from a middle-class European family. “[My parents] didn’t want me to have that American experience of having to live thinking about loans,” the student told the Quest. “That wouldn’t happen at home. They were worried I’d have to change my life decisions based on loans.” This student successfully avoided taking out Minerva’s Climb loans, but only by taking money from savings accounts her family had intended to leave untouched. In a sense, the student told the Quest, they “took loans from [their] own accounts that [they’ll] pay back.”

Some students have declined Climb loans but taken out external loans that they believe have more favorable terms. Tessa Owens, an M’21 from Canada, told the Quest that she took out a student loan from a bank in her home country instead. Meixner similarly took out extra loans with better interest rates instead of Climb loans whenever possible. 

Others, like the anonymous survey respondent who wrote they needed external loans to make ends meet, have accumulated debt from other sources out of necessity rather than preferential terms. The anonymous M’21 student from Europe also told the Quest that he has accumulated $5,000 in credit card debt over the course of his three years at Minerva.

“[My parents] didn’t want me to have that American experience of having to live thinking about loans.”

Anonymous M’20 Student from Europe

Another potential source of student loans for some students is US federal loans, which often have favorable terms. The 6.5 percent interest rate for Minerva Climb loans has been at least 1.5 percentage points higher than the interest rate for US federal subsidized student loans for undergraduates in every year of Minerva’s operation (the federal interest rate ranged between 3.76 and 5.05 percent over this period). With few exceptions, however, only US citizens are eligible for federal student aid, automatically disqualifying the majority of Minerva students from these loans. 

Furthermore, Minerva Schools does not accept any federal funding, so even eligible students cannot receive these loans. “Student loan programs of the US federal government come with an array of rules and obligations that Minerva as an institution would have to follow,” Pelka told the Quest. “That might not be an unreasonable expectation if the vast majority of our student population would stand to benefit. In reality, only a small portion of our students are eligible and all international students would be excluded from receiving any kind of federal loan funds.” He clarified that while some of these federal rules have desirable goals like reducing discrimination and tracking sexual assault, complying with these federal rules would cost Minerva “several hundred thousand dollars a year.”

Given these costs, Climb loans will likely remain the only student loans available through Minerva. While Climb loans are intended to be as affordable as possible and are made more so by Minerva’s negotiations, the burden they create varies depending on a student’s financial background, country of origin, and assumptions about fair interest rates and debt amounts. 

Conclusion

Minerva’s financial aid system promises to create an affordable experience for students regardless of their financial background and country of origin. Compared to many other US colleges and the US federal financial aid system, which mostly ignore international students, Minerva has built an exceptional system that serves students fairly regardless of nationality.

Assessing financial aid only at the institutional level and only by US standards, however, neglects the experiences of students who struggle to afford Minerva and feel that the school has not lived up to its promises. The financial aid system does not currently fully account for many factors, like post-graduation job prospects, that can make a Minerva education much more difficult to afford for international students.

Minerva’s financial aid team has made progress on adapting the application to meet the needs of a global student body, but many challenges have still not been fully addressed and some, such as currency devaluation, may never be mitigated. As it is now, the financial aid system works well for some families. Many current and prospective Minerva students, however, must work hard on their own to fill gaps between what they know they need to pay for college and Minerva’s evaluation.

If you are interested in sharing your experiences with money and financial aid at Minerva with the Quest, please reach out to Emma Stiefel ([email protected]), Erin Paglione ([email protected]) or any Quest editor. If you are interested in writing a personal piece or a report for the Quest on this topic, we encourage you to apply to receive payment for your work in hopes of incentivizing more students to contribute and partially compensating those who do. 

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