Janice Lozano
International students in the US can take out private loans to pay for their tuition fees, but financial experts advise against taking on too much debt. Most international students are unable to work while studying in the US, so it is important to consider the monthly payments and repayment period of a loan, which typically ranges from 10 to 25 years. Students can also apply for scholarships, grants, and tuition waivers, or hire someone to assist with the scholarship hunt. Additionally, international students can take out loans with a cosigner, who is legally obligated to repay the loan if the borrower fails to pay.
| Characteristics | Values |
|---|---|
| Loan options | Private loans, international student loans, federal student loans, no-cosigner loans |
| Cosigner requirements | A US permanent resident with good credit history, who has lived in the US for at least two years |
| Loan amount | Up to the total cost of attendance, including tuition, room and board, transportation, books, supplies, health insurance, and other expenses |
| Interest | Variable rate loans with interest rates based on an index (Prime Rate or SOFR) plus a margin |
| Repayment period | 10-25 years, with options for full deferral or interest-only payments during studies |
| Scholarship opportunities | Free scholarship databases, corporate, nonprofit, and government scholarship funds |
| Financial aid | FAFSA (Free Application for Federal Student Aid) grants, work-study funds |
| Tuition waivers | Offered by states for need-based scholarships |
| Personal finances | Nearly 60% of international students' tuition fees are covered by personal and family sources |
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What You'll Learn
International student loans
When taking out a loan, you will be responsible for paying back the borrowed amount (the principal) plus an additional amount charged by the lender (interest). The interest rate is calculated based on an "index" plus a margin that depends on factors like your cosigner's creditworthiness. The two most common indexes used for international student loans are the Prime Rate and Secured Overnight Financing Rate (SOFR).
Most international students applying for loans in the US must have a US cosigner. A cosigner is legally responsible for repaying the loan if the borrower defaults. The cosigner must be a permanent US resident with good credit and has lived in the US for at least two years. However, some lenders may not require a cosigner if certain criteria are met, such as attending an eligible school and demonstrating high career potential.
Repayment terms depend on the lender and loan option chosen. Since most international students cannot work while studying in the US, it is crucial to carefully consider the monthly payments, when repayment begins, and the possibility of deferring repayment. The repayment period typically ranges from 10 to 25 years, with common repayment plan options available. For example, students can defer payment until six months after graduation or pay only the interest while still in school.
There are loan comparison tools available to help international students find eligible loan options that match their circumstances. These tools allow students to select their citizenship and school to find suitable lenders. It is important to compare the different terms and conditions before choosing a lender and applying for a loan.
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Loan repayment plans
International student loans are a very common way to finance education in the US. The loan repayment period typically ranges from 10 to 25 years, but the larger the loan, the longer the repayment period. The standard repayment plan options are:
Full Deferral
Students can defer payment until 6 months after graduation, as long as full-time status is maintained. Students can defer payments for a maximum of four years, which is the typical length of a degree.
Interest-Only
International students only pay the interest while still in school, for up to four consecutive years of full-time study, and can defer the principal until 45 days after graduation. You may have to start repaying the principal immediately if you drop your course load to part-time.
Immediate Repayment
Payments on both interest and principal are due immediately once the loan has been dispersed.
No Cosigner Loans
Some lenders do not require a cosigner if the borrower meets specific criteria, including attending an eligible school, demonstrating high career potential, and planning to graduate within the next two years.
Variable Rate Loans
For variable-rate loans, the interest rate is calculated based on an "index" plus a margin that will add an additional percentage depending on your cosigner's creditworthiness or other factors decided by the lender. The two most common indexes used for international student loans are the Prime Rate and Secured Overnight Financing Rate (SOFR).
Fixed Monthly Payments
Some lenders allow for fixed monthly payments, for example, $25 per month while studying.
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Scholarships and grants
The US government, private organisations, and specific institutions provide funding for international students. However, scholarships are often competitive, and most are reserved for graduate studies.
- The Aga Khan Foundation International Scholarship provides scholarships for students from select developing countries with no other source of financial aid. The scholarship is 50% grant and 50% loan.
- The American Association of University Women offers fellowships for non-American women pursuing a Master's or doctorate in the USA. Priority is given to women who demonstrate a commitment to advancing women and girls' causes.
- The Civil Society Leadership Awards offer full scholarships for Master's students from specific countries dedicated to fostering social change.
- The Fulbright Foreign Student Program is a government-funded scholarship that provides funding for graduate students, young professionals, and artists to study in the US for one year or more.
- The Hubert Humphrey Fellowship Program is a non-degree scholarship for experienced international professionals to undertake 10 months of academic study in the US.
- The #YouAreWelcomeHere Scholarship is offered by the University of Minnesota and is aimed at all overseas students studying any subject at a participating college or university in the US.
- The Wesleyan Freeman Asian Scholarship Program offers scholarships for 11 exceptional Asian students to study at Wesleyan University in Connecticut. This scholarship covers tuition and student fees.
- The P.E.O. International Peace Scholarship awards scholarships to women from other countries pursuing graduate degrees in the USA.
- The East-West Center Scholarships and Fellowships are aimed at international students from the Asia-Pacific region wishing to study at selected institutions in the US.
- The Japan-United States Friendship Commission offers grant programs to Japanese students wishing to study in the US.
- MPOWER Financing offers scholarships for international and DACA students through its Global Citizen Scholarship Program.
Students can also look into university-specific scholarships. For example, Iowa State University, Michigan State University, New York University, and the University of Arkansas offer scholarships and grants for international students. Additionally, students can explore resources like International Student, Fastweb, and the College Board, which provide searchable databases of scholarships, grants, and other financial aid opportunities.
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Private loans
International students in the USA can take out private loans to pay off tuition fees and other debts. However, most international students are not eligible for federal loans and must borrow from private lenders.
To be eligible for a private loan, international students typically need a US co-signer or co-borrower. The co-signer is legally responsible for repaying the loan if the borrower fails to do so. The co-signer must be a US citizen or permanent resident with good credit and a minimum income. Some lenders may also require the co-signer to have lived in the US for at least two years.
It is important for international students to carefully consider their repayment options, as they may not be able to work while studying in the US. Repayment plans can vary, but typically, students can defer payment until six months after graduation or pay only the interest while still in school. The repayment period can range from 10 to 25 years, depending on the loan amount.
Before taking out a private loan, international students should research other financial aid options, such as scholarships, grants, and fellowships offered by their country's embassy or the US government. They should also check with their college to see if financial aid is available for international students.
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$9.95
Work-study funds
As an international student in the US, you may come across the term "work-study" while searching for jobs. Work-study in the US refers to the federal work-study program, which allows students with financial needs to work part-time and earn money for their education. Unfortunately, this program is not open to international students as it is federally funded. This means that some on-campus jobs may only be available to domestic students participating in the program.
However, some schools have special policies that allow international students to take advantage of work opportunities that are otherwise reserved for students in the federal work-study program. These work opportunities are often funded directly by the school. For example, the University of Pennsylvania uses institutional funding to offer work-study programs to eligible international students.
International students can generally expect to earn at least minimum wage, which can help offset the cost of education. Working while studying can also provide valuable work experience and allow students to practice English in a professional environment. It is important to manage your schedule and understand the demands of your courses before participating in a work-study program.
To find out more about work opportunities, international students can seek guidance from the office of career services or the international students' office. Additionally, F-1 visa students may be eligible to work off-campus in certain situations, such as severe economic hardship, and M-1 visa students may engage in practical training after completing their studies. However, any off-campus employment must be related to their area of study and authorized by the Designated School Official and USCIS.
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Frequently asked questions
International students can take out loans to help pay for college. These loans can cover up to the total cost of school minus any other financial aid received. Students can also take out private loans, although financial experts advise against taking on too much debt.
The repayment period typically ranges from 10-25 years. Students can defer payment until 6 months after graduation as long as full-time status is maintained.
Students can apply for scholarships, grants, or work-study funds. Academic departments within the university may also have funds allocated to assist international students with exceptional need and/or talent.
The average total tuition cost for out-of-state students at online bachelor's programs in the USA is $28,327.
International students should consider how much the monthly payments will be, when payments will begin, and the interest rate. They should also be aware that most international students cannot work while studying in the USA, so they will need to budget for other expenses such as housing, meals, and personal expenses.
