Savanna Hoffman
International students seeking to study in the US often require additional financial aid to cover the costs of tuition, accommodation, books, travel, health insurance, and living expenses. While international students are not eligible for federal student loans from the US government, they can apply for private student loans from banks, credit unions, or online lenders. Most private lenders require a US cosigner with a good credit score and income history, but there are also no-cosigner loan options available at a growing number of universities and colleges. International students should compare lenders and loan options to find the best interest rates and repayment plans for their circumstances.
| Characteristics | Values |
|---|---|
| Loan type | Private student loan |
| Loan purpose | Tuition, books, transportation, living expenses, health insurance, etc. |
| Loan amount | Up to the total cost of school minus any other financial aid received |
| Interest rates | Variable, depending on the lender |
| Repayment period | Generally 10–25 years |
| Repayment options | Full deferral, interest-only, flat fee, etc. |
| Co-signer | Usually required; must be a US citizen or permanent resident with good credit |
| No-co-signer loans | Available at a growing number of universities and colleges, but may have higher interest rates |
| Eligibility | Non-US citizens attending eligible US colleges or universities |
| Application process | Compare lenders, choose the best option, apply online |
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What You'll Learn
Private student loans for international students
Private student loans are available to international students to help cover costs while studying in the United States, Canada, and other countries. International students going to school in America 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.
International student loans are available year-round and can cover up to the total cost of school minus any other financial aid received. The cost of tuition, room and board, transportation, books, supplies, health insurance, and other expenses can add up quickly for international students. Private student loans can help cover these costs.
The majority of international students will require a co-signer, who is a joint applicant on the loan and takes responsibility for repayment if the primary borrower misses any payments. The co-signer should be a US citizen or permanent resident with a good credit score and a good income history. They must have lived in the US for at least two years.
There are also no-cosigner loans available to students at a growing number of universities and colleges. Students without a co-signer can check their eligibility for these loans. Private lenders usually offer three types of repayment terms. The repayment period typically ranges from 10-25 years. Students can defer payment of interest and principal until six months after graduation or for a maximum of four years consecutively.
Before taking out a private student loan, international students should research different lenders and compare interest rates, borrowing limits, and repayment terms. They should also explore other financial aid options, such as scholarships and grants, before borrowing money.
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Comparing loan options
International students going to school in the United States have fewer student loan options than US borrowers. Unless you are an eligible non-citizen who can qualify for federal student loans, you may need to borrow from a private lender.
There are several loan comparison tools available online that can help international students find the best loan option for their unique situation. These tools consider factors such as loan limits, interest rates, cosigner requirements, repayment options, and the number of supported schools.
When comparing loan options, it is important to consider the repayment terms, as these can vary depending on the lender and loan option chosen. Most international students cannot work while studying in the United States, so it is crucial to consider how much the monthly payments will be, when payments will begin, and how long you may be able to defer paying back the loan. The repayment period typically ranges from 10 to 25 years, and there are several common repayment plan options to choose from.
For example, students may be able to defer payment of interest and principal until 6 months after graduation, as long as full-time status is maintained. They can also defer payments for a maximum of 4 years consecutively, which is the typical length of a degree. Alternatively, students can choose to only pay the interest while still in school, for up to 4 consecutive years of full-time study, and defer the principal until 45 days after graduation.
It is also important to consider the loan limit, which refers to the maximum amount of money that can be borrowed from a lender during a specific period. This can be an essential factor when looking for financial aid to cover expenses such as tuition, accommodation, and other living expenses.
In addition, the majority of students will require a cosigner, who needs to be a permanent resident or a US citizen with a good income history, a good credit rating, and who has lived in the US for at least 2 years. However, there are also no-cosigner loans available to students at a growing number of universities and colleges.
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Finding a cosigner
International students often require a cosigner with US citizenship or permanent residency, a solid credit history, and a good income history. This is because most international students do not have a long credit history or income in the US, and a cosigner provides lenders with the guarantee that the loan will be repaid.
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Repayment options
There are some common repayment plan options depending on the loan you select: Students can defer payment of interest and principal until 6 months after graduation, as long as full-time status is maintained. This is known as a full deferral. Students can defer payments for a maximum of 4 years consecutively, which is the typical length of a degree. Alternatively, students can opt to only pay the interest while still in school, for up to 4 consecutive years of full-time study, and can defer the principal until 45 days after graduation. This is known as an interest-only repayment plan. It is important to note that if a student drops their course load to part-time, they may have to start repaying the principal immediately.
Some lenders, such as MPOWER, offer interest-only repayments in school and for six months after graduation. Ascent offers to postpone full principal and interest payments for up to nine months after graduation or leaving the program.
International students should also be aware of the different types of interest rates offered by lenders. Fixed interest rates remain the same throughout the loan, while variable interest rates can change over time. Variable interest rates are often based on an "index" plus a margin that will add an additional percentage depending on the creditworthiness of the borrower or their co-signer. For those with good credit, variable interest rates can sometimes start lower than fixed rates, but they can become more expensive if interest rates rise.
Most international students will require a co-signer, who is legally obligated to repay the loan if the borrower defaults. The co-signer must be a US citizen or permanent resident with good credit and a good income history. However, there are a growing number of universities and colleges that offer no-cosigner loans.
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Alternative financial aid
International students can access alternative financial aid to support their studies, although it may be limited, especially for undergraduate degrees. Here are some options to explore:
Scholarships
Scholarships are a popular option for international students. These can be need-based or merit-based. Need-based scholarships are awarded to students who demonstrate financial need, while merit-based scholarships recognise exceptional talent or ability.
Scholarships can be provided by a range of sources, including private corporations, non-profit organisations, governments, and universities themselves. For example, some US universities offer limited financial aid to international students. International scholarships are specifically designed to support students studying abroad and can open doors to cultural experiences and networking opportunities.
Private Student Loans
Private student loans are another option for international students. These loans can cover tuition, room and board, transportation, books, and other living expenses. Most private student loans will require a cosigner who is a US citizen or permanent resident with good credit. However, a growing number of universities and colleges offer no-cosigner loans.
Institutional Aid
Some public and private universities offer financial incentives for students to attend their institution. These incentives can include discounted tuition fees or waived application fees. Additionally, some universities may offer assistantships and fellowships, although these are more commonly available for graduate study.
Home Country Funding
Your home country may also be a source of funding. Some governments, organisations, or companies from your home country may provide scholarships or other financial support for students studying abroad. For example, Saudi Arabia has a programme that provides full scholarships for Saudi students studying in the USA.
On-Campus Employment
International students may be able to pursue on-campus employment opportunities after their first year of study. This can provide a source of income to help cover expenses.
It is important to carefully research the costs of studying abroad and the various financial aid options available to make an informed decision.
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Frequently asked questions
A co-signer is a relative, friend, spouse, or any creditworthy adult who is a permanent US resident or citizen and has lived in the US for at least two years. They are legally obligated to repay the loan if the borrower defaults. Having a co-signer can make it easier to get a loan and may help you qualify for a lower interest rate.
There are no-cosigner loans available at a growing number of universities and colleges. 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.
The repayment period typically ranges from 10-25 years. There are several repayment plan options, including full deferral, interest-only, and immediate repayment. It's important to consider how much the monthly payments will be, when payments will begin, and how long you may be able to defer paying back the loan.
International student loans can be used to cover education-related expenses such as tuition, books, fees, insurance, room and board, and other living expenses. They can cover up to the total cost of school minus any other financial aid received.
