Lana Oconnell
International students have various financing options available to them when it comes to studying in the US, including scholarships, grants, sponsorships, fellowships, part-time work, and crowdfunding. While federal loans are not available to international students, they are eligible for international student loans, which are specialised private education loans. These loans can be used for education-related expenses such as tuition, books, fees, insurance, and room and board. To apply for an international student loan, most international students must have a US cosigner, although there are lenders that offer loans without a cosigner. The availability of student loans for community colleges depends on the school's participation in federal aid programs.
Can international students get student loans for community colleges?
| Characteristics | Values |
|---|---|
| Federal student loans | Not available to international students |
| International student loans | Available to international students studying in the US |
| Cosigner | A cosigner is legally obligated to repay the loan if the borrower fails to pay; most international students need a US cosigner |
| Interest rates | Variable; based on the creditworthiness of the borrower or their cosigner |
| Repayment | Interest-only payments while enrolled in college, or repayment begins as soon as the loan is disbursed |
| Grace period | Up to six months after graduation |
| Eligible schools | Community colleges, traditional colleges, universities, or graduate schools |
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What You'll Learn
International student loans: eligibility and requirements
International students can apply for international student loans, which are specialized private education loans. These loans are available to international students enrolled in eligible US colleges or universities. The eligibility criteria and requirements for international student loans vary, but here is a general overview:
Eligibility:
To be eligible for an international student loan, one must be enrolled as an international student in an eligible US college or university. Most lenders require international students to have a valid student visa that does not expire soon after graduation. Additionally, the student must be enrolled at least half-time in an accredited program.
Requirements:
International student loans typically require a co-signer who is a US citizen or permanent resident with good credit. The co-signer is legally obligated to repay the loan if the borrower defaults. If a co-signer is not available, some lenders offer no-co-signer loans, but these may come with higher interest rates.
Interest Rates and Repayment:
Interest rates for international student loans are determined based on the creditworthiness of the borrower or co-signer. Lenders may offer fixed or variable interest rates. Some loans may offer a grace period of up to six months after graduation, while others may require interest-only payments during enrollment or immediate repayment upon disbursement.
Loan Amount:
International student loans can cover education-related expenses such as tuition, books, fees, insurance, and room and board. The maximum loan amount is determined by the school's financial aid office, and it covers the total cost of education minus any other financial aid received.
It is important to carefully evaluate the cost of studying in the US and explore alternative funding options, such as scholarships, grants, and tuition-free programs, before applying for international student loans.
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Federal student loans: availability for international students
Federal student loans are not available to international students. Instead, international students can apply for international student loans, which are private education loans available to international students studying in the US. These loans are offered by banks and financial institutions and are credit-based, with the borrower's ability to repay evaluated by the lender based on factors like credit score and income.
International students can apply for student loans without a cosigner, but a no-cosigner loan will likely come with a higher interest rate. A cosigner is legally obligated to repay the loan if the borrower fails to pay and must be a permanent US resident with good credit. The cosigner is often a close friend or relative.
International student loans can be used for education-related expenses such as tuition, books, fees, insurance, and room and board. The loan amount can be up to the total cost of education, minus other financial aid. Interest rates for international student loans are determined by the lender, who considers a chosen benchmark (Prime Rate or SOFR) and adds an extra percentage based on the creditworthiness of the borrower or their cosigner.
To apply for federal student loans, one must submit the Free Application for Federal Student Aid (FAFSA) each year, providing details like a Social Security number, net worth, and tax returns. After review, a student aid report outlines the federal loans and other financial aid one qualifies for. However, this option is not available to international students unless they qualify as eligible non-citizens.
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Private student loans: alternatives to federal loans
International students who are not US citizens or permanent residents can apply for international student loans to cover education-related expenses such as tuition, books, fees, insurance, and room and board. These loans are a type of specialised private education loan, and are available to international students studying in the US.
Private student loans can help international students pay for community college when federal loans or grants are unavailable or insufficient. However, private student loans often have fewer borrower protections and higher interest rates than federal loans.
When considering a private student loan, it is important to evaluate the interest rate type, repayment plan, and loan terms. The interest rate for international students is determined by the lender's chosen benchmark (Prime Rate or SOFR) and an extra percentage based on the creditworthiness of the borrower or their co-signer. A co-signer is legally obligated to repay the loan if the borrower defaults, and must be a permanent US resident with good credit who has lived in the US for at least two years.
There are private lenders that offer loans specifically for community college students, such as College Ave, Sallie Mae, Ascent, and Custom Choice. Lenders may set a maximum annual amount that can be borrowed, or establish a combined private and federal amount that must not be exceeded to qualify for a loan. The amount borrowed cannot exceed the school's total cost of attendance, less other financial aid.
It is recommended to also apply for grants and scholarships, and to consider a cheaper college. Studying for one or two years at a community college before transferring to a four-year college can result in significant savings.
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Interest rates: factors and considerations
International students considering community college in the US should be aware of the various factors that determine interest rates on their loans. Understanding these factors will help them make informed decisions about their finances and ensure they can afford the repayments.
Firstly, international students need to determine their eligibility for loans. Each loan has different terms and requirements, and it is important to understand all the associated costs, including interest rates and fees. Students should carefully evaluate how much money they will need for their education, including tuition, books, fees, insurance, room and board, and living expenses. They should also consider the type of college they plan to attend, as more prestigious programs will be more expensive.
Secondly, international students should be aware that their interest rates may be higher than those offered to domestic students in the US, resulting in higher debt than anticipated. The interest rate is computed using a benchmark rate (such as the Prime Rate or SOFR) plus an extra percentage based on the creditworthiness of the borrower or their co-signer. A co-signer is a permanent US resident with good credit, and their creditworthiness can impact the final interest rate.
Additionally, students should consider the repayment terms of their loans. Federal loans offer flexible repayment plans based on income, borrower protections, loan forgiveness programs, and payment pauses. In contrast, private loans often have fewer borrower protections and higher interest rates. Students should also be mindful that interest accrues while they are in school, unless they have subsidised federal loans. To save on interest, students can make monthly interest-only payments or pay a fixed amount while in school.
Finally, it is crucial for international students to have a financial plan and understand the potential consequences of their loans. They should consider whether studying abroad will be worth the interest rate in the future and be aware of how it may affect their credit score if they struggle to make payments after graduation. Understanding these factors and considerations will enable international students to make informed decisions about their loan interest rates and overall financial health.
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Other financing options: scholarships, grants, and more
International students can apply for international student loans, which are specialized private education loans available to those studying in the US. However, most international students applying for loans must have a US co-signer, such as a close friend or relative, who is a permanent US resident with good credit.
Before taking out a loan, it is recommended that international students research other funding opportunities, such as scholarships, grants, and tuition-free programs. Here are some options for other financing options besides loans:
- Scholarships: Students can start by researching funding opportunities from their country's embassy or governmental educational office to see if there are applicable scholarships. They can also use the U.S. Department of Labor's scholarship search engine to identify scholarships, fellowships, and financial aid awards. Additionally, checking with the college directly to see if they offer scholarships or financial aid specifically for international students is a good idea. Organizations like Education USA advise international students on topics like financing college in the US.
- Grants: The U.S. Department of Labor's scholarship search engine also provides information on grants. Additionally, students with Deferred Action for Childhood Arrivals (DACA) status may be able to receive grants funded by their state, school, or private lenders.
- Tuition-free programs: Some colleges offer tuition-free programs that can help reduce the overall cost of attendance.
- Financial aid from the school: Many colleges offer financial aid to international students, so it is worth checking with the school's financial aid office to explore these options.
- Family funds: Students can also consider using their family's funds to help finance their education.
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Frequently asked questions
No, international students are not eligible for federal student loans in the US. However, international students are eligible for international student loans, which are specialized private education loans.
Most international students applying for loans must have a US co-signer. The co-signer must be a permanent US resident with good credit who has lived in the US for at least the past two years. International students might also explore parent loans to pay for college.
Alternatives to student loans include scholarships and grants, sponsorships, assistantships and fellowships, getting a part-time job, asking family or friends for money, and crowdfunding.
