Lori Meadows
International student loans are a realistic way to finance your education in a foreign country. They are available to non-citizens studying at a college or university in the host country and can cover up to the total cost of school minus any other financial aid received. Most international students applying for loans must have a co-signer, usually a US citizen or permanent resident with good credit, to improve their chances of getting approved and to lower their interest rate. The co-signer is legally obligated to repay the loan if the borrower defaults. The repayment period typically ranges from 10-25 years, with students able to defer payment until 6 months after graduation as long as full-time status is maintained.
| Characteristics | Values |
|---|---|
| Who is eligible? | Non-US citizens studying at a college or university in the US |
| Who can be a co-signer? | A US citizen or permanent resident with good credit who has lived in the US for the past two years |
| What is the interest rate? | Variable, depending on the creditworthiness of the borrower or their co-signer |
| What is the repayment period? | 10-25 years |
| When do repayments begin? | Students can defer payment until 6 months after graduation, or until they drop their course load to part-time |
| What is the maximum loan amount? | The total cost of attendance, minus any other financial aid received |
| What can the loan be used for? | Tuition, room and board, books and supplies, personal expenses, transportation, health insurance, etc. |
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What You'll Learn
Understanding the total cost of attendance
The total cost of attendance, or COA, is an important factor in determining your financial need and the amount you are eligible to borrow in both federal and private student loans. It is an official number determined by each college or university and includes tuition and fees, books and supplies, room and board, transportation and personal expenses.
The COA is the school's sticker price and may differ depending on your housing situation. For example, there may be one cost of attendance for students living on campus, as room and board are set and transportation will likely not be needed. On the other hand, there may be a different COA for students living off-campus, which includes estimated rent and transportation costs.
Your college will use the information provided on your FAFSA to determine your expected family contribution (EFC). This is an estimate of your ability to pay, taking into account income, assets, family size, and the number of family members attending college. Your EFC is then subtracted from the COA to determine your financial need, which is the maximum amount of need-based aid you can receive. Need-based aid can include scholarships, Pell Grants, work-study, and subsidized federal student loans.
When applying for international student loans, it is important to consider the total cost of attendance, as you can typically borrow up to the total cost of attendance, minus any other financial aid received. This means that understanding the COA can help you determine how much you may need to borrow in student loans and how much you will need to save or earn during the year to afford attendance.
Additionally, as an international student, it is crucial to consider currency exchange rates, which can affect the total cost of your loan. Most international students will also need a US cosigner to apply for a loan, and it is important to evaluate how much the monthly payments will be and when repayments will begin.
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Finding a cosigner
International students looking to apply for a loan in the US will almost always require a cosigner. This is because most international students do not have a long US credit history or income established in the country, so lenders require a cosigner to move forward with the loan application. A cosigner is someone who agrees to share legal responsibility for your student loan and becomes equally responsible for the loan and making payments if the primary borrower is unable.
A cosigner must be a US citizen or permanent resident who has lived in the US for the past two years and has good credit. They should have a steady income, a stable job, and an established credit history. Lenders will evaluate your cosigner's existing and past loans to see whether they were paid on time.
If you are struggling to find a cosigner, it may be possible to find a loan without a cosigner. However, this may be more difficult and you may need to shop around for lenders who will accept international students without a cosigner.
If you do have a cosigner, it is important to prepare before asking someone to be your cosigner. You should be able to explain why you need the loan amount you are asking for and show them a breakdown of your expenses and budget. It is also a good idea to create a solid repayment plan that demonstrates how you will manage your monthly loan payments, including your job prospects and anticipated income after graduation. You should also be able to explain what you would do if you were unable to make a payment.
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Comparing loan options
International students going to school in America have fewer student loan options than most US borrowers. Unless you are a US citizen or permanent resident, you will likely need a cosigner to apply for a loan. A cosigner is someone who joins an international student on their loan application and is legally obligated to repay the loan if the borrower defaults. The cosigner must be a US permanent resident with good credit who has lived in the US for at least the past two years. The cosigner is often a close friend or relative who can assist in getting credit, as most international students cannot receive credit on their own.
If you are unable to find a cosigner, there are some loans that do not require one, but they may be harder to find and get approved for. You can use a loan comparison tool to see if you're eligible to apply for a loan without a cosigner.
When comparing loan options, it is essential to consider the repayment terms, as they will depend on the lender and loan option you choose. Most international students cannot work while studying in the US, so it is 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. The repayment period typically ranges from 10-25 years, and there are some common repayment plan options depending on the loan you select. For example, students are often able to defer payment of the interest and principal until 6 months after graduation as long as full-time status is maintained. Students can defer payments for a maximum of 4 years consecutively, which is the typical length of a degree.
It is also important to understand the difference between fixed and variable interest rates and choose an option that works best with your budget and preference. Variable interest rates are 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).
There are many lenders that offer loans for international students, including Ascent, Sallie Mae, College Ave, and SoFi, and you can use a loan comparison tool to find the one that works best for your circumstances.
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Applying for scholarships and financial aid
Calculate the Cost of Attendance:
Firstly, it is crucial to evaluate the total cost of your education. This includes tuition fees, room and board, transportation, books, supplies, health insurance, and any other personal expenses. This calculation will help you determine the amount of financial aid you require and the gap that needs to be filled through scholarships or loans.
Research Scholarships:
There are numerous scholarship opportunities available for international students, and you can find many of them online. Websites like InternationalScholarships.com, IEFA.org, and InternationalStudent.com offer comprehensive scholarship search platforms with thousands of awards. These scholarships are typically merit-based or need-based, and some are specific to certain fields of study. You can also check with your chosen university, as some public and private universities offer financial incentives, assistantships, or fellowships for international graduate students. Additionally, consult with your academic department, as they may have funds allocated for international students with exceptional needs and talents.
Understand Scholarship Requirements:
Scholarships often have specific eligibility criteria. Merit-based scholarships, for instance, may consider factors such as TOEFL scores, academic records, artistic abilities, musical talents, or athletic achievements. Need-based scholarships, on the other hand, are awarded to students who can demonstrate a financial need that meets a predetermined level. Ensure that you carefully review the requirements of each scholarship to maximize your chances of success.
Apply for Scholarships:
Once you have identified the scholarships that align with your profile and interests, start working on your applications. Each scholarship may have its own unique application process and requirements, so tailor your applications accordingly. Strong applications will highlight your strengths, skills, and any relevant experiences that make you a worthy recipient.
Explore Financial Aid Options:
In addition to scholarships, international student loans are a common way to finance your education. These loans are specifically designed for non-US citizens studying in the United States and can cover up to the total cost of attendance, minus any other financial aid received. You can use loan comparison tools, such as those provided by InternationalStudentLoan.com, to find eligible loan options and understand the repayment terms and interest rates.
Remember, applying for scholarships and financial aid requires careful research and planning. Start your search early, and don't be afraid to reach out to the universities and organizations offering the scholarships and loans for more information.
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Repayment plans
Full Deferral
With full deferral, students can defer loan payments until six months after graduation, provided they maintain full-time status. The maximum deferral period is typically four years, which is the standard duration of an undergraduate degree. During this time, students are not required to make any payments towards the loan principal or interest.
Interest-Only Payments
In this option, international students are required to pay only the interest accrued on the loan while still enrolled in school. This arrangement can last for up to four consecutive years of full-time study. After graduation, students can defer paying the principal amount for up to 45 days. However, if a student drops their course load to part-time, they may need to start repaying the principal immediately.
Immediate Repayment
Under immediate repayment plans, both the interest and principal payments become due immediately after the loan is disbursed. This means that students are responsible for making regular payments while still enrolled in their studies.
It is important to carefully review the repayment terms offered by different lenders and choose a plan that aligns with your financial circumstances. Additionally, consider factors such as monthly payment amounts, the repayment start date, and the possibility of deferring payments if needed.
International students applying for loans in the United States typically need a US co-signer with good credit who has been a resident in the country for at least the past two years. This co-signer is legally responsible for repaying the loan if the borrower defaults. However, there are a limited number of lenders, such as Juno, that offer loans to international students without a co-signer.
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Frequently asked questions
International student loans are specialised private education loans available to international students studying in the US. They are a realistic way to finance your education in the US, offering high loan amounts with extended repayment terms and reasonable interest rates.
You should apply for an international student loan after you have researched and exhausted other funding options, such as scholarships, financial aid from your school, and personal funds.
Most international student loans require a US cosigner. The cosigner must be a US citizen or permanent resident with good credit, income history, and have lived in the US for at least the past two years. The cosigner is legally responsible for repaying the loan if the borrower fails to pay. Some lenders may not require a cosigner if you meet specific criteria, such as attending an eligible school and demonstrating high career potential.
The repayment period for international student loans typically ranges from 10 to 25 years. There are different repayment plan options available, including full deferral, interest-only, and immediate repayment. With full deferral, students can defer payment until six months after graduation, for up to four years. Under the interest-only option, students pay only the interest while in school and defer the principal until 45 days after graduation. With immediate repayment, payments on both interest and principal are due immediately after the loan is disbursed.
