Douglas Olsen
Studying abroad can be a life-changing experience, but it's also a costly one. The good news is that there are ways to get loans to fund your international education.
If you're a US citizen or eligible non-citizen, you may be able to get federal student loans to attend a foreign university. Many international schools participate in the US federal student aid program, and you can apply for these loans by completing the Free Application for Federal Student Aid (FAFSA). However, federal grants and work-study programs are usually not available for study abroad.
If federal aid isn't an option, private student loans could be the next best choice. These are issued by banks, credit unions, and online lenders, but finding private loans for international study can be challenging as many US lenders focus on stateside students.
International students studying in the US can also get specialised private education loans, but these usually require a US co-signer.
| Characteristics | Values |
|---|---|
| Types of Loans | Federal and Private Loans |
| Federal Loan Requirements | Enrolled as a "regular" student, qualified to study at the postsecondary level, enrolled at least half-time, making satisfactory academic progress, meet citizenship criteria, have a correct social security number, not be in default on any Title IV program loan, satisfy Selective Service registration requirements, not be subject to ineligibility based on a drug conviction |
| Federal Loan Application | Free Application for Federal Student Aid (FAFSA) |
| Federal Loan Amount | $5,500 to $20,500 per year for undergraduates and up to $20,500 for graduate students |
| Federal Loan Interest Rates | Direct Subsidized Loans: lowest interest rates; Direct Unsubsidized Loans: higher interest rates; Direct PLUS Loans: higher interest rates |
| Private Loan Requirements | US citizen or US permanent resident, enrolled at an approved US school, receiving credit at your home college or university |
| Private Loan Application | No FAFSA required |
| Private Loan Amount | Up to the total cost of attendance, less other aid |
| Private Loan Interest Rates | Variable |
What You'll Learn
Federal student loans for international schools
U.S. students can use federal student loans to pay for their international programs. Over 750 international schools participate in federal student loan programs.
How to get federal student loans for international schools
Federal loans are likely the best place to start when looking for student loans for international schools. They often have lower rates and more benefits than private student loans. The Direct Loan Program is one of the most affordable and accessible federal options, though PLUS loans can also be useful.
Federal student loan options for international schools
Undergraduates can get Direct subsidized and unsubsidized loans. The interest rate for these is currently 4.99%, plus a one-time 1.057% origination fee. If eligible, it is recommended to utilize subsidized loans first since the government pays the accruing interest while you’re in school.
Parents of undergraduates can help finance their child’s degree with parent PLUS loans. These loans have an interest rate of 7.54% and a one-time fee of 4.228%.
Graduate and professional students can access Direct unsubsidized loans with a rate of 6.54% and a 1.057% fee. Grad PLUS loans are also an option, with a 7.54% interest rate and a 4.228% fee.
Federal student loan limits for international schools
The usual student loan limits apply to federal student loans for international schools. For example, a college sophomore classified as a dependent student can only borrow up to $6,500 (of which only $4,500 can be in subsidized loans) for the school year.
Unfortunately, these student loans are the only federal aid offered to U.S. students at foreign colleges. Other types of federal student aid, such as Pell Grants or work-study, won’t be available when earning a degree at a non-U.S. school.
How to access federal loans at a foreign school
Accessing federal loans at a foreign school is similar to getting them at a U.S. college. Here are the steps to access federal student loans for international schools:
- Make sure your international school is eligible for federal student loans. You can check a list of international schools that participate in federal student loan programs, which is updated quarterly.
- Submit a Free Application for Federal Student Aid (FAFSA). The form is the same for all students, whether attending a U.S. or foreign college. When submitting your FAFSA, select the international school you’re attending.
- Meet all federal student aid eligibility requirements. In addition to submitting the FAFSA, you must show you’re eligible for federal student aid, such as being enrolled at least half-time and being a U.S. citizen or eligible noncitizen. You’ll also need to maintain your school’s satisfactory academic progress (SAP) by completing courses and getting decent grades.
- Work with your international school to complete the student loan process. Your school can guide you through its process to claim your federal student loans. These funds will generally be disbursed to your foreign school directly.
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Private student loans for international schools
Finding private loans for international degrees can be challenging as many U.S. lenders limit their business to stateside students. However, some lenders, such as Sallie Mae, offer loans to students attending schools outside the U.S.
- Eligible lenders: Choose lenders who provide funding for your foreign school. Many lenders will also require a student loan cosigner to meet the higher credit requirements.
- Affordability: Opt for private student loans with low-interest rates and minimal or no fees. You can estimate your monthly payments using a student loan repayment calculator.
- Deferment option: Inquire about deferment policies on private student loans. For example, if you want to defer payments until after graduation, ensure the lender allows this.
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Direct Subsidized Loans
The U.S. Department of Education pays the interest on a Direct Subsidized Loan:
- While the student is in school at least half-time
- For the first six months after the student leaves school (known as a grace period)
- During a period of deferment (a postponement of loan payments)
The interest on a subsidized Stafford loan will be paid by the government while students are in school or while loans are in deferment. Meanwhile, the interest on an unsubsidized Stafford loan will be paid by the student and is added to the loan balance.
There are annual and aggregate loan limits in place. The annual loan amount is a cap on the amount of subsidized and unsubsidized loans a student may borrow in any year, set by the U.S. Department of Education. The cumulative loan amount is the aggregate amount of subsidized and unsubsidized loans a student may borrow in their lifetime.
For undergraduate students, the maximum amount that can be borrowed each year in Direct Subsidized Loans and Direct Unsubsidized Loans ranges from $5,500 to $12,500 per year, depending on what year the student is in school and their dependency status.
To apply for a Direct Subsidized Loan, students must first complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed, the school will review the results and the student will receive an "Award Letter" informing them about their loan eligibility. They may then apply for the Federal Stafford loan.
There is no credit check required for Stafford Loans, and there are no cosigners on Federal Stafford Loans.
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Direct Unsubsidized Loans
The student’s school determines the amount the student can borrow based on the student’s cost of attendance and other financial aid he or she receives.
The maximum borrowing limits in unsubsidized loans can range from $5,500 to $20,500 a year per student based on several factors, such as whether the student is a dependent or independent, and their year in college.
To apply for a Direct Unsubsidized Loan, you must first complete the Free Application for Federal Student Aid (FAFSA) or Renewal FAFSA. After the FAFSA is processed, your school will review the results and you will receive an "Award Letter" informing you about your loan eligibility. You may then apply for the Federal Stafford loan.
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PLUS Loans
Parent PLUS Loans
Parent PLUS Loans are available to parents of undergraduates to help finance their child's degree. These loans have a higher interest rate of 7.54% and a one-time fee of 4.228% compared to Direct Loans. They are not based on financial need but do require a credit check.
Grad PLUS Loans
Grad PLUS Loans are available to graduate and professional students and have the same interest rate and fee as Parent PLUS Loans.
How to Apply for PLUS Loans
To apply for PLUS Loans, you must first fill out the Free Application for Federal Student Aid (FAFSA). The FAFSA will determine your eligibility for federal student aid, including PLUS Loans. You must also ensure that your chosen international school is eligible for federal student loans and participates in the Direct Loan Program. The U.S. Department of Education maintains a list of eligible international schools, which is updated quarterly.
Once you have submitted the FAFSA and confirmed your school's eligibility, you will receive information from your school regarding the next steps, including how and when your loans will be disbursed and any additional requirements.
It is important to note that PLUS Loans may not be available at all eligible international schools, and other types of federal student aid, such as Pell Grants or work-study programs, are not available at foreign colleges. Therefore, it is essential to research the specific aid options available at your chosen school.
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Frequently asked questions
There are two main types of student loans available for studying at foreign universities: federal loans and private loans. Federal loans are granted by the US government, while private loans are granted by private institutions such as banks or other approved lenders.
To apply for federal student loans, you need to fill out the Free Application for Federal Student Aid (FAFSA). This will determine your eligibility for loans, grants, or work-study funds. Once you have filed the FAFSA, you will hear directly from your chosen school about the next steps, deadlines, and how your loans will be disbursed.
Yes, there are several requirements to receive federal student aid for attendance at a foreign university. You must be enrolled as a "regular" student in an eligible program at an eligible foreign institution, be qualified to study at the postsecondary level, be enrolled at least half-time, make satisfactory academic progress, meet specific criteria related to citizenship, and have a correct social security number, among other requirements.
International students studying in the US are not eligible for federal financial aid but can qualify for some private loans. These loans typically require a US citizen with good credit, such as a relative or friend, to be a co-signer. International student loans offer high loan amounts, extended repayment terms, and reasonable interest rates.
