Douglas Olsen
International students often face challenges when it comes to financing their education, especially in countries like the United States, where federal and state funding is typically restricted to citizens or eligible non-citizens. However, this doesn't mean that financial aid is completely out of reach for international students. While they may not be eligible for government-provided financial aid, there are alternative options available, such as private international student loans, scholarships, and school-specific grants. Additionally, top-tier colleges often have larger endowments, allowing them to offer more generous financial aid packages to students, regardless of their nationality. Furthermore, some universities determine an international student's need-based financial aid eligibility during the admissions process, and certain circumstances, like drastic changes in family financial circumstances, may allow international students to appeal for financial aid.
| Characteristics | Values |
|---|---|
| International students' eligibility for federal financial aid | Not eligible for federal financial aid, but may be eligible for institutional financial aid |
| FAFSA application | Not required for international students, but may be requested by some colleges or universities to assess financial need and award school-specific grants and scholarships |
| Social Security number requirement | Needed for FAFSA submission; some international students may obtain one depending on their visa status |
| Types of financial aid available | Scholarships, loans, and financial aid from colleges or universities |
| Factors influencing financial aid | Institution type (private non-profits more likely to provide aid), ranking (top-tier colleges have larger endowments), and admission policies (need-blind admissions) |
| Need-based financial aid | Determined during the admissions process; re-application required each year |
| Documentation for need-based financial aid | Proof of family income, tax forms, or employer statements |
| Appeals for financial aid | Considered in cases of significant changes in family financial circumstances due to specific reasons |
| Taxation on international student stipends | Subject to US taxation; up to 14% may be withheld, unless the student's country of residence participates in a Tax Treaty Benefit with the US |
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What You'll Learn
International students and eligibility for FAFSA
International students are not eligible for federal financial aid in the US, and therefore usually don't need to complete the FAFSA (Free Application for Federal Student Aid). However, there are still ways for international students to receive financial aid.
Some colleges or universities may ask international students to submit a FAFSA so they can use the information to assess financial need and award their own school-specific grants and scholarships. A Social Security Number (SSN) is needed to submit a FAFSA, and some international students may be able to obtain one depending on their visa. If so, students can submit their FAFSA using this number and answer "No" to the question asking if they are a US citizen.
Additionally, international students can apply for scholarships, loans, and financial aid. Top-tier colleges have the largest pool of money to give out and will often provide generous financial aid packages to students, regardless of where the student is from. For example, at Harvard, international students are eligible for the same amount of aid as US students, and the application process is essentially the same. Yale also extends its need-blind admissions policy to international students.
International students can also consider private international student loans, such as those offered by Ascent, which offers private co-signed loan options for international students.
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Scholarships and grants for international students
While international students are not eligible for federal or state aid, they can still receive financial aid in the US. This may include scholarships, grants, and loans.
Scholarships
International students can apply for scholarships, which can cover tuition, housing, and other expenses. Some scholarships are offered by individual colleges and universities, while others are provided by organisations. For example:
- The Aga Khan Foundation International Scholarship provides scholarships to students from select developing countries who have no other source of financial help for their graduate studies.
- The #YouAreWelcomeHere scholarship is offered by colleges and universities, providing two yearly renewable scholarships for international undergraduate students.
- The American Association of University Women offers fellowships for non-American women seeking a Master's or doctorate in the USA.
- The Civil Society Leadership Awards offer full scholarships for Master's students from specific countries who are dedicated to fostering social change.
- The Joint Japan/World Bank Graduate Scholarship Program provides comprehensive financial coverage for students from developing countries applying for a development-related Master's program.
Grants
Grants are another option for international students seeking financial aid. Grants are typically awarded based on financial need and can come from a variety of sources, including colleges, universities, and private organisations. International Student has a searchable database of grants that are available to international students.
Loans
International students may also consider taking out loans to help finance their studies. While some private loans may be available, it is important to carefully consider the terms and conditions before taking on any loan. Federal loans, such as the Federal Direct Loan, are typically only available to US citizens and eligible non-citizens. However, international students may still be eligible for private international student loans offered by companies like Ascent.
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Loans for international students
While international students are not eligible for federal financial aid in the US, there are still ways to receive financial aid, such as scholarships, loans, and grants.
International students can apply for private international student loans. These loans are offered by organisations such as Ascent Funding and MPOWER Financing.
Ascent Funding
Ascent offers private cosigned loan options for international students. Over 115,000 people have used Ascent to pay for school. Ascent also provides loans for students attending a coding career training school pursuing a degree in technology, professional training, or licensure training.
MPOWER Financing
MPOWER Financing provides international student loans for eligible US or Canadian colleges or universities. They offer fixed-rate loans from US$2,001 to US$100,000 at competitive interest rates with up to 0.25% in interest rate discounts. MPOWER does not require collateral or a cosigner for their loans. They make loan decisions based on the student's future potential and ability to work in the US and repay the loan.
Other Options
Most loans for non-US citizens will require a US cosigner, which can improve the chances of getting approved and lower the interest rate. However, some lenders, such as MPOWER Financing and certain eligible schools in the US and Canada, offer no-cosigner loans for international students. Additionally, some colleges or universities may ask international students to submit a Free Application for Federal Student Aid (FAFSA) to assess their financial need and award school-specific grants and scholarships.
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Need-based financial aid
International students may qualify for need-based financial aid, but their options are often more limited than those of domestic students. While international students studying in the US do not qualify for federal or state aid, they can still access institutional grants and scholarships, as well as private loans.
Need-based grants and scholarships
Some US colleges and universities offer need-based grants and scholarships to international students. For example, Clark University provides need-based grants to a select number of first-year and transfer international students each year. Ohio Wesleyan University also offers need-based aid to international students, in addition to a $35,000 per year scholarship for Fall 2025.
Private loans
International students and their families may be able to borrow from private lenders, although financial aid experts advise against taking on too much debt. Paras Education Services (PES), for example, is a financial consultant that helps international students obtain study abroad loans with interest rates ranging from 2% to 7% and repayment terms of 15 or 20 years.
Other resources
International students seeking financial aid can also explore online resources such as eduPASS, Funding for U.S. Study, the College Board, and FinAid. NAFSA, the Association of International Educators, also provides information and publications on financing an education in the United States.
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Tax implications of international student stipends
While financial aid for international students can be limited in the US, it is not non-existent. International students can apply for scholarships, loans, and financial aid. For instance, at Harvard, international students are eligible for the same amount of aid as US students, and the application process is essentially the same. Yale also extends its need-blind admissions policy to international students.
International students may have to pay taxes on scholarships and stipends they receive. A stipend is generally considered taxable income, but it is not treated the same as a salary. Stipends are usually provided to cover living expenses for interns, researchers, or trainees, and are subject to income tax. However, they are not usually subject to Social Security and Medicare taxes. The stipend tax rate depends on your total income, filing status, and any potential tax treaties. The usual withholding tax rate is 30%. However, if you are a non-resident alien student on an F, J, M, or Q visa in the US, the tax rate may be reduced to 14%.
To report a scholarship or stipend on your tax return, you must:
- Collect all forms and documents related to your scholarship, including Form 1042-S (Foreign Person’s US Source Income Subject to Withholding).
- Separate any relevant qualified and non-qualified expenses. Qualified expenses are generally tax-free if they cover tuition, fees, books, supplies, and equipment required for courses. Non-qualified expenses, such as room and board, travel, and research, are typically taxable.
- Report the taxable portion of your scholarship on Form 1040 or 1040-NR.
- If you received a Form W-2 for part of the scholarship, include that information as well.
International students who receive only stipends and who claim exemption from all or part of the tax based on a tax treaty must complete IRS Form W-8BEN and forward it to the University Payroll Office. International students who are appointed as student officers must complete IRS Form 8233 and forward it to the University Payroll Office.
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Frequently asked questions
International students are not eligible for federal aid from the FAFSA (Free Application for Federal Student Aid). However, they can still qualify for merit aid, scholarships, grants, and private student loans.
FAFSA is the financial aid form for accessing grants, federal student loans, and work-study funds. It is intended for US citizens and certain eligible noncitizens.
International students can fund their education through scholarships, grants, private student loans, and institutional aid. They can also take on on-campus employment or apply for fellowships and assistantships.
