As an international student preparing to study in the United States, you have plenty of logistics to figure out. From getting your student visa to planning travel arrangements and finding a place to stay, it is easy to get overwhelmed. And when you add “paying for school” to that ever-growing list, you may not even know where to start.
The good news? There are plenty of financial aid options for international students in the United States, including student loans. This guide will walk you through the process of qualifying, applying for, and repaying a student loan for international students, plus other options (like scholarships and grants) to cover the costs of college.
Student Loans for International Students
First, it is important to understand what it means to be an international student in the United States, as well as the borrowing options generally available to these students.
Defining Who is an International Student in the U.S.
A person who is not a United States citizen or permanent resident but is residing in the United States for the purposes of studying is considered an international student. Typically, these students carry non-immigrant visas, such as an F-1 or J-1 visa. International students are required to leave the country or apply for citizenship after they complete their schooling in the United States.
Overview of Student Loan Options Available to International Students
There are a few different options that international students may consider when looking to borrow money to pay for school. Some examples of common loan options available to international students include:
- Private loans from a third-party lender (not the government).
- International student loans, which may also take the form of private loans.
- Loans to study abroad from a student’s home country.
Types of Student Loans for International Students
For permanent residents of the United States, the two main types of student loan are federal and private. However, we will go into detail below about why most international students need to either borrow from a private lender or secure funding to study abroad from their home country to pay for college in the United States.
Federal Student Aid: Eligibility and Application Process
Unfortunately, international students are not eligible to receive federal student loans or any other type of federal aid. This means they do not have access to subsidized or unsubsidized loans available through the United States government, often at an interest rate that is lower than other borrowing options.
Still, it is worth noting that completing a Free Application for Federal Student Aid (FAFSA) may still be recommended for international students because this application could qualify you for some state or institutional aid in the form of grants and scholarships.
Private Student Loans: Finding the Right Lender for You
The most common type of loan taken out by international students in the United States is a private student loan, which comes not from the government but from a third-party institution, such as a bank or credit union.
If you are thinking about using private student loans to pay for some (or all) of your schooling in the United States, it is important to find the lender with the best possible terms and lowest interest rate. This will take some time and research on your end, as will completing the application process for each prospective lender.
The Role of Cosigners in Securing Student Loans
Generally, international students do not have time to establish a credit history in the United States before they need to start applying for student loans. Without an established credit history, getting approved for a private loan could be difficult if you do not have a cosigner, or somebody who could help you qualify for a loan.
In rare cases, an international student may be able to qualify for a loan without a cosigner if they have high career potential or plan to graduate from their respective program within the next year or two.
The Importance of Having a Cosigner
When you have a cosigner on your loan, this means that your cosigner is agreeing to be jointly responsible for repaying the money you have borrowed. In other words, if you are unable to repay your loan in full for any reason, your cosigner would be responsible for paying off the balance. With this in mind, agreeing to be somebody’s cosigner is a major commitment and not one to be taken lightly.
On the other hand, finding somebody to cosign on your student loans in the United States could make it easier to get the money you need to pay for school. Likewise, having a cosigner with an excellent credit score could even help you qualify for a lower interest rate, which could save you some money in the long run.
How to Find a Cosigner for Your Student Loan
Remember that a cosigner for a private loan in the United States needs to have an established credit score here, so the person you ask to be your cosigner will likely need to be a United States citizen. In addition to having a credit score in the United States, your cosigner should have proof of a steady income and a stable job. In some cases, a cosigner may need to provide additional information or documentation in the form of references and bank account details. Finding a cosigner for a student loan for international students could help with approval chances.
Comparing Student Loans: What International Students Need to Know
As you begin exploring your student loan options for studying in the United States, there are a few things you should look at when comparing lenders and individual loan offers.
Interest Rates and Repayment Terms Explained
One of the most important things to look at when assessing a student loan offer is the interest rate, which is reflected as a percentage. The higher the interest rate, the more you will end up paying back over the life of the loan and its repayment term.
Interest rates may vary greatly from lender to lender based on a number of factors, including the economy and even your cosigner’s credit score.
Look closely at the repayment terms of the loan, as well. This includes information on how long you will have before you need to start paying back your student loans and how long your repayment term will be.
In many cases, international students could take advantage of “full deferral” options, which allow them to make zero payments on a student loan until after they graduate. However, should you decide to go this route, it is crucial to understand that interest may still accrue on your balance during that time. This is why many international students make interest-only payments, if possible, while they are still in school.
Fees and Additional Costs Associated With Student Loans
In addition to interest, there may or may not be other fees or costs associated with your student loans. Origination fees and even application fees could add up quickly, so it is a good idea to do your research and plan ahead before you begin submitting loan applications.
Scholarships and Grants as Alternatives to Student Loans
International students should also exhaust their options for scholarship and grant funding before they turn to student loans for financial aid. After all, scholarships and grants do not need to be paid back, and there are many options available to make paying for schooling easier on international students.
Finding Scholarships Tailored for International Students
Many colleges, universities, and private organizations in the United States offer scholarships specifically to international students, so be sure to check with your school of choice. In many cases, institutional scholarships do not even require a separate application, so you may be automatically considered when you are approved for your program of study.
In other cases, you may need to use a free platform like FastWeb to find scholarship options for which you could apply.
Applying for Grants: Tips and Best Practices
Another option to consider is applying for grants, which are available to international students in the United States from any number of private programs and fellowships. Your school’s financial aid office will generally be the best source of grant opportunities open to international students, so you may want to start there.
Preparing to Apply for a Student Loan
Even once you have found a student loan option that suits your needs, there are a few things you will need to do before you submit your application.
Documents and Information Required
First, be sure to gather any documentation that you will need to submit along with your loan application. This could vary from one lender to the next, but typically includes a completed application form, cosigner information, proof of your student visa, and details about the school/program of study into which you have been accepted.
After you apply for a student loan, some lenders offer an instant decision, whereas others may take a few days or more to process an international student application.
Understanding Your Financial Needs and Budgeting Accordingly
While student loans could be a useful option to help you pay for your schooling in the United States, it is important to plan ahead and borrow wisely. This means taking the time to understand your financial needs and not borrowing more than could reasonably afford to repay after you complete your schooling. Before you accept a loan offer, take time to figure out what your monthly repayment amount will be so you could plan and budget accordingly.
Repayment Strategies for International Students
As you repay your student loans, whether during school or after graduation, there are a few more things to keep in mind.
Managing Your Repayments While Studying
For starters, if you have a deferred payment on your student loans, remember that your loan will probably still accrue interest while you are in school. Because of this, it may make sense to at least make payments on your loan to cover interest costs during your studies. Otherwise, the interest accrued on your loan will capitalize, thus adding to your balance and costing you more money in the long run.
Post-Graduation Repayment Plans and Options
Be sure to also explore the post-graduation repayment plans available to you. Some lenders may give you six months or more after graduation before you need to start paying on your loans, whereas others may require you to make payments while you are in school.
Lenders also offer different repayment terms, with options ranging from 10 to 25 years. A longer repayment term will mean a lower monthly payment, but you will also end up paying more in interest this way.
In addition to loan repayment plans, many schools offer cash payment plans that allow students to pay tuition and fees directly, reducing or eliminating the need for loans. Using a cash payment plan can help students manage costs as they go, minimizing debt after graduation.
Explore International Student Resources at Post University
International students have various options for financing their education in the United States, including private student loans and scholarships. The key, of course, is understanding those options and being able to determine which types of financial aid best suit your needs and eligibility.
At Post University, we are committed to supporting our large population of international students with a wide range of resources, including robust financial aid options that include scholarships, grants, payment plans, and more. We even offer a number of unique on campus and online international student scholarships with no separate application required. Learn more about Post University and our many academic programs available, or feel free to start your online application today!
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