Lana Oconnell
International students seeking to study in the United States can access private student loans to cover the costs of their education. These loans are available to non-US citizens enrolled in undergraduate or graduate programs at American colleges and universities. While federal loans are not available to international students, private loans can help cover tuition, room and board, transportation, books, and other expenses. To apply for a private loan, international students typically need a cosigner who is a US citizen or permanent resident with a good credit score and income. Additionally, it is recommended to explore other financial aid options, such as scholarships and grants, before taking out loans.
| Characteristics | Values |
|---|---|
| Who can apply? | Non-US citizens studying at a college or university in the US |
| What do they cover? | Tuition, room and board, transportation, books, supplies, health insurance, and other expenses |
| How much can you borrow? | Up to the total cost of school minus any other financial aid received |
| What type of loans are available? | Private student loans |
| Do federal student loans apply to international students? | No |
| Do you need a cosigner? | Yes, usually. The cosigner must be a US citizen or permanent resident with good credit and an annual income of at least $30,000 |
| What is the interest rate? | Variable, depending on the creditworthiness of the borrower or their cosigner |
| What is the repayment schedule? | Immediate or deferred repayment options are available, with extended repayment terms |
| What is the application process? | Compare lenders, complete the online application, and provide required documentation (e.g., I-20 form, visa) |
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What You'll Learn
Private student loans
International students in the US have fewer student loan options than US citizens. Unless they are eligible non-citizens who can qualify for federal student loans, they will need to borrow from a private lender.
There are many private lenders that provide loans to international students. To find the right lender for your circumstances, you can use a loan comparison tool. After selecting your citizenship and school, the tool will return a list of lenders that will work for you. You can then compare the different terms and conditions and choose the lender that works best for you.
Because international students do not have a credit history in the US, most lenders require them to have a US co-signer. A co-signer is legally obligated to repay the loan if the borrower fails to pay. The co-signer must be a permanent US resident with good credit who has lived in the US for the past two years. The co-signer is often a close friend or relative who can assist in getting credit.
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Interest rates and fees
When determining the interest rate for an international student loan, lenders consider the chosen benchmark (Prime Rate or Secured Overnight Financing Rate) and add an extra percentage based on the creditworthiness of the borrower or their co-signer. The creditworthiness of the co-signer can also impact the interest rate, with a higher rate charged if they have a poor credit history. Obtaining a loan without a co-signer is possible, but interest rates may be higher.
Some lenders, such as Earnest and Juno, offer competitive APRs and lack origination or other fees. Ascent has competitive rates and offers a choice between fixed and variable rates, but there is a late payment fee of up to $25. MPOWER offers a 0.25% interest rate discount for borrowers who make their loan payments through automatic withdrawal. Autopay discounts are also offered by other lenders, such as NerdWallet, which offers a 0.25% reduction, and Ascent, which offers a 0.25% rate cut through autopay.
It is important for international students to carefully evaluate their financial needs and explore all options, such as scholarships, grants, and family funds, before taking out loans. Understanding the interest rates and fees associated with loans is crucial to making an informed decision and ensuring responsible borrowing.
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Eligibility requirements
International students seeking loans to fund their education in the United States must meet specific eligibility requirements. Here are the key criteria:
Citizenship and Residency
International student loans are designed for non-US citizens pursuing their education in the US. These loans are not available to US citizens or permanent residents.
Enrollment in an Eligible Institution
To be eligible for an international student loan, you must be enrolled or accepted for enrollment in an accredited college or university in the US. The institution must be eligible for international student loans, so it is important to check the eligibility criteria of your chosen school.
Cosigner Requirements
Most international student loans require a cosigner who is a US citizen or permanent resident with a good credit history and income. The cosigner is legally responsible for repaying the loan if the borrower fails to do so. The cosigner must typically have lived in the US for at least the past two years. However, there are also no-cosigner loan options available at a growing number of universities and colleges.
Loan Amount and Repayment Terms
International student loans usually cover the total cost of attendance, including tuition, room and board, books, transportation, and other expenses. The loan amount may be limited to the cost of attendance minus any other financial aid received. Repayment terms vary, with options for full deferral until six months after graduation, interest-only payments during school, or immediate repayment of interest and principal.
Creditworthiness
The interest rate on the loan is determined by the creditworthiness of the borrower or cosigner. The lender uses benchmarks like the Prime Rate or the Secured Overnight Financing Rate (SOFR) and adds an extra percentage based on the borrower's or cosigner's creditworthiness.
It is important to carefully evaluate the cost of studying in the US and explore other financial aid options, such as scholarships and family funds, before applying for international student loans. These loans are designed to fill the funding gap after exhausting other sources of financial aid.
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Application process
International students can apply for loans to help pay for college, as costs can quickly add up when factoring in tuition, room and board, transportation, books, supplies, health insurance, and other expenses. International student loans are available year-round and can cover up to the total cost of school minus any other financial aid received.
The application process for international student loans can vary depending on the lender, but here are some general steps to follow:
Compare Loan Options:
Firstly, it is important to compare different loan options to find the one that best suits your needs. You can use online comparison tools that will match you with eligible loan options based on factors such as the college you will be attending and the amount of money you need to borrow.
Gather Documentation:
Before submitting your application, ensure you have gathered all the required documentation. This typically includes a completed application form, information about a cosigner (if required), proof of your student visa, and details about the school or program you have been accepted into.
Complete the Application:
Fill out the loan application thoroughly and accurately. Provide all the required information and be honest in your responses. Some applications may offer instant approval, while others may take a few days or more to process international student applications.
Understand Repayment Terms:
Before committing to a loan, be sure to understand the repayment terms, including monthly payments, when payments begin, and the length of the repayment period. Consider any available repayment plan options, such as full deferral or interest-only payments while still in school.
Explore Other Options:
Before taking out a loan, explore other financial aid options such as scholarships and grants. These options do not need to be paid back and can help reduce the overall cost of your education.
Stay Organised:
Keep track of all your application materials, correspondence with lenders, and important dates. This will help you stay organised and ensure you are meeting any deadlines or requirements during the application process.
By following these steps, international students can navigate the application process for securing a student loan to support their educational goals in the United States.
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Alternative funding options
International students are not eligible for federal student loans or state student aid programmes in the US. However, there are alternative funding options available to them. Here are some options to consider:
Scholarships and Grants
International scholarships are specifically designed to help fund education programs overseas. They are a popular option for students seeking to gain a global perspective and cultural experience. Your home country could be a source of funding, with organizations or companies from your home country or government providing scholarships. For example, Saudi Arabia offers a program that provides full scholarships to over 10,000 Saudi students studying in the USA. Private grants are another alternative source of funding.
Private Student Loans
International students can apply for private student loans, which are specialized education loans available to those studying in the US. These loans can cover up to the total cost of school minus any other financial aid received. Most private loans will require a cosigner who is a permanent US resident or citizen with a good credit rating and income history. However, there are also no-cosigner loan options available at a growing number of universities and colleges.
University Financial Aid
Many US colleges and universities offer limited financial aid for international students through their financial aid offices. It is worth contacting the institution of your choice to inquire about their specific financial aid programs and application processes. Private institutions may sometimes be able to offer discounted tuition fees, whereas public institutions rarely have this option.
Exchange Programs
Participating in a formal exchange program between your home institution and the institution you wish to attend in the US can help reduce expenses. Contact the international student offices at both institutions to explore these possibilities.
Work Opportunities
While strict immigration regulations in the US restrict working while on a student visa, there are some employment opportunities available. F-1 status allows for part-time, on-campus employment (less than 20 hours per week), and J-1 status offers similar employment with permission from the exchange visitor program sponsor. Graduate research or teaching assistantships may also provide work opportunities.
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Frequently asked questions
International students are not eligible for federal student loans in the US and will need to borrow from a private lender. To do so, the majority of students will require a co-signer who is a US citizen or permanent resident with a good credit rating and income history. There are also no-cosigner loans available at a growing number of universities and colleges.
You can use a loan comparison tool to find eligible loan options and choose the lender best suited for you. You will then need to complete the loan application, which may require proof of identification and resident status.
The interest rate will depend on the benchmark rate (usually the Prime Rate or SOFR) and an additional percentage based on the creditworthiness of the borrower or their co-signer.
