Janice Lozano
International students in the USA can apply for private student loans, but they often require a co-signer who is a US citizen or permanent resident with good credit. Some lenders may consider your program of study, academic performance, and future career prospects instead of a co-signer, but these loans may carry higher interest rates. There are also scholarships, grants, and fellowships that international students can apply for, as well as financial aid from their college or home country. It is important to consider the monthly payments, when repayment will begin, and how long one can defer paying back the loan, as most international students are unable to work while studying in the US.
| Characteristics | Values |
|---|---|
| Who can get personal loans? | Banks, credit unions, and online lenders offer private student loans for international students. |
| Federal student loans | International students are not eligible for federal student loans. |
| Co-signer | A co-signer is required for international students to get a loan. The co-signer must be a U.S. citizen or permanent resident with good credit. |
| Co-signer alternatives | Some lenders consider the program of study, academic performance, and future career prospects when evaluating potential borrowers. |
| Interest rates | The interest rate is calculated based on a benchmark rate (Prime Rate or SOFR) plus a margin that depends on the creditworthiness of the borrower or co-signer. |
| Repayment period | The repayment period typically ranges from 10-25 years. |
| Repayment options | There are several repayment options available, including full deferral, interest-only, and fixed monthly repayment plans. |
| Scholarships and grants | International students may be eligible for scholarships, grants, and fellowships from their college or home country. |
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What You'll Learn
International students' eligibility for federal student loans in the USA
International students are generally not eligible for federal student loans in the USA. However, they may be eligible for international student loans, which are specialized private education loans available to international students studying in the US. These private student loans are offered by some banks, credit unions, and online lenders.
To be eligible for a private student loan as an international student, a cosigner with good credit who is a US citizen or permanent resident is typically required. The cosigner is legally obligated to repay the loan if the borrower defaults. Some lenders may not require a cosigner, but the loan will likely carry a higher interest rate.
International students can also explore other financial aid options before borrowing money, such as scholarships, grants, and fellowships. They can start by researching funding opportunities from their country's embassy or governmental educational office. They can also use the U.S. Department of Labor's scholarship search engine to identify scholarships, fellowships, grants, and financial aid awards. Additionally, some colleges offer financial aid specifically for international students, so it is worth checking with the college to see what opportunities are available.
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Private student loans for international students
International students in the USA have fewer student loan options than most US borrowers. Unless they are eligible non-citizens who can qualify for federal student loans, they may need to borrow from a private lender.
Some banks, credit unions, and online lenders offer private student loans for international students who do not qualify for federal aid. However, international students commonly have a family member permanently residing in the US co-sign their student loans. A co-signer should be someone the student knows well and trusts. If a student is unable to get a co-signer but still wants a private loan, some lenders consider their program of study, academic performance, and future career prospects when evaluating potential borrowers. Loans without a co-signer may carry higher interest rates than loans with co-signers.
International students can compare private lenders and find the loan that best suits their needs. For instance, Citizens Bank features the highest loan maximums among lenders, while Earnest does not charge origination or other fees. Ascent is a good option for students with low minimum credit score requirements.
Before taking out a loan, it is important to consider how much the monthly payments will be, when payments will begin, and how long the repayment period will be. The repayment period typically ranges from 10 to 25 years. There are several common repayment plan options depending on the loan selected. For example, students can defer payment of interest and principal until 6 months after graduation as long as full-time status is maintained. Students can also defer payments for up to 4 years consecutively, which is the typical length of a degree.
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The role of a cosigner for international students
International students in the USA commonly face challenges in obtaining personal loans due to a lack of established credit history or collateral. This is where a cosigner can play a crucial role. A cosigner is someone who agrees to share the legal responsibility of repaying a loan with the borrower. They are usually a family member or close relative, but they can also be a friend, professor, mentor, or religious leader. The role of a cosigner is to provide financial assurance on behalf of the borrower and help secure funding. They need to have a consistent and ample income to repay the debt promptly and exhibit financial stability without any outstanding debt. The cosigner's credit history and income history help the lender assess whether the loan can be repaid and increase the chances of loan approval. It is important to note that even with a cosigner, loan approval is not guaranteed, but it can improve the chances of securing a loan and qualifying for more favourable loan terms. The cosigner and borrower should have open communication and transparency about expectations and responsibilities before moving forward with the loan.
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Sources of financial aid for international students
International students in the USA have several sources of financial aid available to them, although funding opportunities are generally limited. Here are some options to consider:
Scholarships
Scholarships are the main way to fund studies in the US. There are private, institutional, and government-funded scholarships available. Many universities offer scholarships to talented international students, and some schools offer sports scholarships, while others provide academic or artistic scholarships. Scholarships can be highly competitive, but with impressive achievements and a strong application, your chances of securing funding are good.
Loans from Private Lenders
Some banks, credit unions, and online lenders offer private student loans for international students. These loans often require a co-signer who is a US citizen or permanent resident with good credit. The co-signer should be someone you know well and trust. Private loans may carry higher interest rates than federal loans, and you will need to carefully consider the repayment terms and conditions.
Work-Study Programmes
International students with F-1 or J-1 status are allowed to work part-time on campus (less than 20 hours per week) and, in some cases, off-campus with permission. However, working while studying cannot be your sole source of funding, and most jobs will only provide spending money for personal expenses.
Financial Aid from the College/University
Many US colleges and universities offer limited financial aid for international students. Private institutions may sometimes be able to discount or reduce tuition fees, while public institutions rarely have this option. Check directly with the university to see if they offer financial aid to international students and request information about this when requesting an application form.
International Organisations
Several international organisations, such as the Fulbright Commission and the Open Society Foundations, offer student aid for non-citizens studying in the US. Many of these organisations require you to apply from your home country, so plan ahead as competition can be fierce.
Family Funding
According to the Institute for International Education, nearly 60% of international students in the USA in the 2022-23 academic year were funded by their families and relatives. While this is an option, it is important to remember that the income you declare for your application must be assured and sufficient to cover at least the first year of your studies.
It is recommended that you research funding opportunities from your country's embassy or governmental educational office, as well as utilise scholarship search engines, to explore all possible sources of financial aid.
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Repayment options for international students
There are some standard repayment plan options:
- Full Deferral: Students can defer payment of both interest and principal until six months after graduation, as long as full-time status is maintained. The maximum period for deferment is four years, which is the typical length of an undergraduate degree.
- Interest-Only: Students pay only the interest while still in school, for up to four consecutive years of full-time study. The principal can be deferred until 45 days after graduation, or when the student switches to part-time.
- Immediate Repayment: Payments on both interest and principal are due immediately once the loan has been disbursed.
It is important to note that most international students cannot work while studying in the United States, so repayment options become a crucial consideration. The monthly payment amounts, the start date of repayment, and the length of any deferment period should all be carefully evaluated before taking out a loan.
International students often require a co-signer who is a US citizen or permanent resident with good credit. The co-signer agrees to be jointly responsible for the repayment of the loan if the borrower fails to pay. This can impact the interest rate of the loan, with higher credit scores resulting in lower interest rates.
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Frequently asked questions
International students can get student loans in the USA from private lenders, but they often require a co-signer who is a US citizen or permanent resident with good credit.
The co-signer must have a good credit score (typically above 690) and meet income requirements. They should be someone you know well and trust, such as a family member, professor, mentor, or religious leader.
Yes, international students may be eligible for scholarships, grants, and fellowships. Many prominent universities have grant funds to help international students with tuition fees. Some countries also offer scholarships to their citizens studying abroad.
International student loans can cover education-related expenses such as tuition, books, fees, insurance, room and board, personal expenses, and transportation.
