Lori Meadows
International students can apply for student loans in the USA, but they are generally only eligible for private loans. These loans are available from various loan providers, and there are a number of eligibility requirements that must be met. For example, international students usually need a cosigner, who is a US citizen with an excellent credit score, a steady income, and a stable job. The cosigner is legally obligated to repay the loan if the borrower fails to pay. However, there are a small number of no-cosigner loans available to international students.
| Characteristics | Values |
|---|---|
| Who can get international student loans? | Non-US citizens studying at a college or university in the US |
| What types of loans are available? | Private loans from a third-party lender (not the government), international student loans, and loans from the student's home country |
| Are federal loans available to international students? | No, international students are not eligible for federal loans or any other type of federal aid |
| What are the requirements for a private loan? | Credit history or a cosigner with a good credit score |
| Who can be a cosigner? | A US citizen or permanent resident with a good credit score, a steady income, and a stable job |
| What are the repayment terms? | Repayment period typically ranges from 10-25 years, with options for full deferral or interest-only payments during school |
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What You'll Learn
International student loan options
International students can access student loans in the USA, but they are not eligible for federal student loans or any other type of federal aid. Instead, international students can apply for international student loans, which are private education loans available to non-US citizens studying in the US. These loans are offered by third-party lenders and can cover up to the total cost of school, minus any other financial aid received.
Loan Options
There are several options for international students seeking loans to study in the USA:
- Private loans from a third-party lender: These are loans offered by private lenders, not the government, and are the most common option for international students. They often require a cosigner who is a US citizen or permanent resident with good credit.
- International student loans: These are specialized private education loans available specifically to international students studying in the US. They can offer loan amounts high enough to cover the entire cost of education and have flexible repayment terms.
- Loans to study abroad from the student's home country: International students can also explore funding options from their home country to support their studies in the USA.
- No-cosigner loans: A growing number of universities and colleges offer no-cosigner loans, which do not require the student to have a cosigner.
- Specialized loan programs: Certain loan programs cater to specific student profiles, such as Prodigy Finance, which offers graduate loans to international students based on their future earning potential, or RISLA, which offers loan forgiveness for borrowers who complete eligible internships.
Factors to Consider
When considering international student loan options, it is important to evaluate the following:
- Interest rates: The interest rate for international student loans is typically determined by a benchmark rate (Prime Rate or SOFR) plus an additional percentage based on the creditworthiness of the borrower or their co-signer.
- Repayment plans: International students should carefully consider the repayment terms of the loan, including monthly payments, when payments begin, and the length of the repayment period. Most international students cannot work while studying in the US, so a longer repayment period may be preferable.
- Scholarships and financial aid: Before taking out loans, international students should exhaust other funding options, including scholarships, financial aid from the school, and personal or family funds.
In summary, international students have several loan options available to finance their studies in the USA. It is important to carefully evaluate the costs, interest rates, and repayment terms before selecting a loan that best suits the student's financial needs and circumstances.
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Cosigners and credit scores
International students in the US often do not have time to establish a credit history before they need to start applying for student loans. Most lenders require a cosigner with an established credit score in the US to join the standard application process. The cosigner is legally bound to repay the loan if the borrower defaults.
The approval and interest rates of the loan are based on the credit score of the cosigner. The higher the credit score, the lower the interest rate. The cosigner must be a permanent US resident with good credit who has lived in the US for at least two years. They should also have proof of a steady income and a stable job.
International students can use loan comparison tools to find lenders that offer loans without a cosigner. In rare cases, an international student may be able to qualify for a loan without a cosigner if they have high career potential or are close to graduating.
It is important to note that building a credit score in the US can bring enormous benefits. While it takes time to establish credit, there are some steps international students can take to build their credit score, such as reporting their rent, opening a US bank account, and applying for a credit card.
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Private loans from third-party lenders
International students in the United States are not eligible for federal student loans or any other type of federal aid. Therefore, they often need to borrow from a private lender or secure funding from their home country.
When choosing a private loan, it is essential to compare different lenders and their loan offerings. Factors to consider include customer service ratings, fixed and variable APR, loan product availability, minimum and maximum loan terms and amounts, and online features. Additionally, it is crucial to understand the repayment terms, as most international students cannot work while studying in the US. The repayment period typically ranges from 10 to 25 years, and there are various repayment plan options available, such as full deferral and interest-only plans.
Some popular private lenders for international students in the US include:
- RISLA: Offers loan forgiveness of $2,000 for borrowers who complete eligible internships and zero interest for working nurses in Rhode Island.
- Ascent Funding: Provides flexible repayment options, no fees, and a 1% cash back graduation reward.
- MPOWER: Considers future income potential instead of credit scores and offers non-co-signed loans.
- Earnest Private Student Loans: Offers a nine-month grace period, which is longer than most lenders, and loan amounts ranging from $1,000 to the total cost of attendance.
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Scholarships and grants
International students in the US often require additional financial aid to support their education. While federal loans are not available to international students, there are other options, such as international student loans and private loans. However, these usually require a cosigner, which can be challenging for international students to find.
Fulbright Foreign Student Program
The Fulbright Foreign Student Program is a popular option for international students, including graduate students, young professionals, and artists from all fields except medicine. It offers scholarships for those wishing to study or conduct research in the US for a year or more.
Aga Khan Foundation International Scholarship
This scholarship assists students from select developing countries who have no other means of financial support for their graduate studies. It offers a 50% grant and a 50% loan, helping to cover the cost of tuition and other expenses.
P.E.O. International Peace Scholarship
The P.E.O. International Peace Scholarship is awarded to women from other countries pursuing graduate degrees in the US. It supports these women in their academic endeavours and promotes peace and international goodwill.
East-West Center Scholarships and Fellowships
The East-West Center offers scholarships and fellowships for international students from the Asia-Pacific region to study at selected institutions in the US. This scholarship aims to foster cultural exchange and understanding between the East and the West.
University Scholarships
Many universities in the US offer scholarships specifically for international students. For example, Iowa State University has the International Merit Scholarships, which are merit-based awards for high-achieving international students. New York University also provides the NYU Wagner International Scholarships for international students at the NYU Wagner Graduate School of Public Service.
MPOWER Financing Global Citizen Scholarship
The Global Citizen Scholarship Program by MPOWER Financing has broad eligibility criteria and is open throughout the year. It offers scholarships for international and DACA students, helping them pursue their educational goals in the US.
In addition to these scholarships and grants, international students can also explore opportunities such as work-study programs, teaching or research assistantships, and on-campus employment to supplement their financial resources. It is beneficial to research and apply for multiple options to maximize the chances of securing the necessary funding for studying in the US.
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Repayment plans
International students in the US are not eligible for federal loans and must, therefore, rely on private lenders for their education loans. These loans are flexible and can often cover the entire cost of education, but they come with varying repayment terms and interest rates.
Most international students do not have a credit history in the US, so they require a co-signer with an excellent credit score and steady income to qualify for a loan. The co-signer is legally obligated to repay the loan if the borrower defaults. The co-signer must be a US citizen or permanent resident and must have lived in the US for at least two years.
There are, however, no-cosigner loans available at a growing number of universities and colleges. These loans usually come with higher interest rates and may not cover the full cost of education.
- Full Deferral: Students can defer payment until six months after graduation, as long as they maintain full-time status. The maximum deferral period is four years, which is the typical length of an undergraduate degree.
- Interest-Only: Students only pay the interest while in school, up to four consecutive years, and can defer the principal until 45 days after graduation or when they drop their course load to part-time.
- Immediate Repayment: Payments on both interest and principal are due immediately once the loan has been disbursed.
- Fixed Monthly Payments: Students can make fixed monthly payments of $25 on their own loan while in school.
- Full Payment While Enrolled: Students can also choose to make full interest and principal payments while still enrolled.
It is important for international students to carefully evaluate the repayment terms of their loan, as they are generally unable to work while studying in the US. They should consider how much the monthly payments will be, when payments will begin, and how long they can defer repayment.
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Frequently asked questions
No, international students are not eligible for federal student loans or any other type of federal aid. However, international students are eligible for international student loans, which are specialised private education loans.
Most international students applying for loans must have a US cosigner. The cosigner must be a permanent US resident with good credit who has lived in the US for the past two years. In rare cases, an international student may be eligible for a loan without a cosigner if they have high career potential or are close to graduating.
The repayment period typically ranges from 10-25 years. There are several repayment plan options, including full deferral, where students can defer payment until 6 months after graduation, and interest-only, where students pay only the interest while in school.
Yes, international students can apply for scholarships, financial aid from their school, or loans from their home country.
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