Douglas Olsen
International students often face challenges when it comes to financing their education, particularly in the United States. While federal student loans are typically unavailable to international students, there are alternative financing options, including private student loans, scholarships, institutional aid, and school discounts. International students may also be eligible for loan forgiveness programs, such as the one offered by the Yale School of Management, which provides support to alumni working in the public or nonprofit sectors. Additionally, international students can explore private lenders like MPOWER Financing, which offers fixed-rate loans without requiring cosigners, credit history, or collateral. Understanding the eligibility requirements and exploring various resources can help international students secure the necessary funding for their studies.
| Characteristics | Values |
|---|---|
| International students' eligibility for federal student loans | Not eligible in most cases, unless they are eligible non-citizens or have T non-immigrant status |
| Private student loans | Eligible, but dependent on the credit score and income of the student or their cosigner |
| Loan forgiveness programs | Eligibility varies; e.g., the Yale School of Management offers a Loan Forgiveness Program for alumni, including international students, working in specific sectors |
| Loan refinancing | Limited availability for international student loans; some lenders may require a creditworthy cosigner who is a U.S. citizen or permanent resident |
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What You'll Learn
International students' eligibility for federal loans
International students studying in the US can apply for international student loans to cover the total cost of school, minus any other financial aid received. These loans are available year-round and can be compared using a loan comparison tool. Most lenders require international students to have a US cosigner—someone who can legally sign loan papers to help them obtain a loan. The cosigner's creditworthiness will affect the interest rate of the loan.
The two most common indexes used for international student loans are the Prime Rate and the Secured Overnight Financing Rate (SOFR). SOFR is determined by the federal funds rate, which is set by the US Federal Reserve—the rate at which banks lend to one another. The repayment period for these loans typically ranges from 10 to 25 years, and students can often defer payment of interest and principal until six months after graduation.
International students may be eligible for federal student loan forgiveness programs offered by the US government, such as the Public Service Loan Forgiveness (PSLF) program. To benefit from PSLF, borrowers must repay their federal student loans under an income-driven repayment (IDR) plan. Under an IDR plan, monthly student loan payments are based on income and family size, and any remaining balance on the loans will be forgiven after a certain number of payments over 10, 20, or 25 years.
Additionally, international students who work full-time for a government or nonprofit organization may qualify for forgiveness of the entire remaining balance of their Direct Loans after making 120 qualifying payments (at least 10 years of payments). Other forms of loan discharge include closed school discharge, which applies if a school closes while a student is enrolled or soon after they withdraw, and Teacher Loan Forgiveness, which offers up to $17,500 in loan forgiveness for those who teach full-time for five consecutive years in certain low-income schools.
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Loan forgiveness for public service jobs
International students have fewer student loan options to pay for US institutions than citizens. Unless they are qualifying non-citizens eligible for federal student loans, they will likely need private loans. International student loans are available to non-US citizens studying in the US, but since international students do not have a credit history in the US, most lenders require a co-signer or guarantor who is a US citizen or permanent resident.
The Public Service Loan Forgiveness (PSLF) program was created by the US government as part of the College Cost Reduction and Access Act of 2007. PSLF offers loan forgiveness for federal student loan borrowers working full-time for the government or a qualifying non-profit organization. To qualify for PSLF, borrowers must be employed at a US government organization at any level (federal, state, local, or tribal) or for a qualifying non-profit organization. Borrowers must also enroll in an income-driven repayment (IDR) plan or the Standard Repayment Plan and make 120 qualifying monthly payments on time and in full. The different types of IDR plans that qualify include the Income-Driven Repayment (IDR) plan and the Standard Repayment Plan. As of July 2024, $69.2 billion of student loan debt has been discharged through the program.
It is important to note that the PSLF program is not available for private student loans. Only federal direct loans are eligible for forgiveness under borrower defense. Borrowers seeking forgiveness must work in a job that the government considers public service and make 120 payments through an appropriate income-based repayment plan. Many borrowers do not realize they have the wrong type of loan and are not eligible for debt relief.
The borrower defense is exclusive to students who were "misled, defrauded, or otherwise harmed by predatory colleges and universities" and seek forgiveness on their loans. Students can decide whether to submit an application for loan forgiveness under borrower defense by first finding out if their student loans are eligible.
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Private lenders for international students
International students have fewer student loan options to pay for US institutions than citizens. Unless you are a qualifying non-citizen eligible for federal student loans, you will likely need to borrow from a private lender. Private student loans are available to international students to help cover costs while studying at college in the US.
International students do not have a credit history in the US, so most lenders require them to have a US co-signer or guarantor. The co-signer must be a US citizen or permanent resident with a strong credit history and income, and they should have lived in the US for at least the preceding two years.
Some private lenders for international students include Earnest, Ascent, and Citizens Bank. Earnest offers competitive APRs, a lack of fees, and strong performance in every area measured by Investopedia. They also have low minimum credit score requirements. Ascent is a good option for those with low credit scores. Citizens Bank features the highest loan maximums among lenders researched by Investopedia.
International students should also research funding opportunities from their country's embassy or government educational office to see if there are applicable scholarships. They can also use the US Department of Labor's scholarship search engine to identify scholarships, fellowships, grants, and financial aid awards.
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Loan forgiveness for international students at Yale
International students in the US have fewer student loan options than citizens. Unless they are qualifying non-citizens eligible for federal student loans, they will likely need private loans. International student loans are available to non-US citizens studying in the US, but most lenders require an American co-signer or guarantor.
The Yale School of Management has a Loan Forgiveness Program that international students are eligible for. The program has been running since 1986 and provides support to qualified alumni working in the public or non-profit sectors. The terms of the Loan Forgiveness Program are subject to change at any time.
To be eligible, graduates must be employed full-time by a government organisation or non-profit 501(c)(3) tax-exempt organisation in the United States, or the equivalent abroad. The program supports the repayment of annual need-based loans. The income level at which the program fully supports loan repayment is adjusted according to the year of admission and program.
Loan Forgiveness Program funds are disbursed directly to participants semi-annually (January and July), based on a standard ten-year loan repayment schedule. Participants are responsible for making all loan payments and complying with all processing requirements.
International students at Yale should contact the School of Management Office of Financial Aid for information about loan eligibility.
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Loan forgiveness eligibility requirements
International students have fewer student loan options to pay for US institutions than citizens. Unless they are eligible non-citizens, they will likely need private loans. International students are generally not eligible for federal student loans and federal student aid. However, eligible non-citizens can fill out the FAFSA and may qualify for federal loans and grants.
Eligible non-citizens include US nationals and natives of American Samoa or Swains Island, and those with a green card. Other eligible non-citizens include:
- People with permanent resident status
- People with an arrival-departure record (I-94) from U.S. Citizenship and Immigration Services that shows "refugee," "asylum granted," "Cuban-Haitian Entrant," "Conditional Entrant," or "Parolee" status
- Students with T non-immigrant status (a T-visa) for victims of human trafficking or their children or who meet the definition of "battered immigrant-qualified alien"
- Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau
International students can also explore scholarships, institutional aid, and school discounts to reduce the amount they borrow. Many scholarships and institutional aid packages do not need to be repaid.
Private student loans are another option for international students, but eligibility depends on the credit score and income of the student or their co-signer. This can be challenging for international students without a US credit history. Some private lenders, such as MPOWER Financing, do not require co-signers, credit history, or collateral on their loans.
International students may also be eligible for loan forgiveness programs, such as the Yale School of Management Loan Forgiveness Program. This program is available to alumni of the Yale School of Management who are employed full-time by a government organization or nonprofit 501(c)(3) tax-exempt organization in the United States, or the equivalent abroad. The program supports the repayment of annual need-based loans and reimburses alumni for the loan principal at a rate of 1/10 annually.
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Frequently asked questions
International students are not eligible for federal student loans in most cases. However, there are some exceptions, including permanent residents and those with T non-immigrant status, which is granted to victims of human trafficking.
Yes, there are several private lenders that offer loans to international students, including MPOWER Financing and Ascent. These loans often have higher interest rates and require a co-signer with a strong credit history and income.
There are limited options for loan forgiveness for international students. The Public Service Loan Forgiveness program is available to graduates working in public service, but it has complex eligibility requirements and low approval rates. Additionally, some schools, like the Yale School of Management, offer loan forgiveness programs for their alumni, including international students.
International students can explore scholarships, institutional aid, and school discounts to help fund their education without taking on debt. Many scholarships and institutional aid packages do not need to be repaid and are a great first step before considering student loans.
The application process for international student loans can vary. Some schools use the CSS Profile, an online application for non-federal institutional aid, while others have their own financial aid applications. It is important to research the specific requirements and application processes for the schools and lenders you are considering.
