Its that time of year again when international students are frantically trying to put together their funding for the year, and evaluating how much of a loan to apply for. To help, we are re-posting this article that originally ran last august.
Financing an education in the United States is difficult, even for a US student. For international students, paying for college in the US is even harder. Almost two-thirds of all students enrolled at private four-year US schools receive loans of some type. US students can receive loans guaranteed by the government (Stafford loans, among others), but these valuable loans are not available to international students. Luckily, private student loans are available to international students on the same terms received by US students.
Before applying for a loan, you should exhaust the following potential funding sources:
1. Apply for international student financial aid from your school. Here’s a searchable list of schools awarding financial aid to international students: http://www.internationalstudent.com/schools_awarding_aid/
2. Research and apply for international student scholarships on your own: http://www.InternationalScholarships.com
3. Carefully evaluate how much money you or your family can provide towards your education. Every dollar you can pay directly is one less dollar you have to borrow.
Some international students can fund their US education simply using the sources above. However, like US students, most international students will need to fund at least a portion of their US education, if not the entire amount, with loans.
· US Co-Signer Required. International student loans require a US citizen or permanent resident (Green card holder) as a co-signer. The loans are credit-based, meaning the co-signer must have good credit history, good employment history (or other income history if the co-signer does not work), and must have lived in the US for the past two years. Although not everyone can find a family member, friend or other US citizen or permanent resident to co-sign for them, for those that do, they can access private student loans on the same basis as US students.
· Funds Paid Directly to You. Loan funds are paid to you, not to the school. This is a great feature in that you can use the funds for living expenses – but it also means that it is up to you to use the funds responsibly. Pay your tuition, room and board, health insurance and books first – anything extra is a luxury!
· Repayment. Repayment of an international student loan can be deferred while you are in school, and for six months after you finish school. After that, you will have up to 20 years to repay the loan, with a payment due every month. You are also eligible for hardship extensions if you run into unexpected circumstances that prevent you from being able to repay the loan for a short period of time.
· Interest Rates. Interest rates are variable, based on the LIBOR plus a margin. LIBOR is always several points below prime, so the margin is from 3.5% to 7.75%, and will be set by the lender based on the credit history of your co-signer and the repayment plan you select. The better your co-signer, the better your rate! LIBOR changes monthly, up or down, so the rate will be reset monthly. Click here for repayment examples for a $10,000 undergraduate international student loan.
· Online Application. You can apply online or by phone, and receive an almost immediate response as to whether you are conditionally approved for the loan. Then, you will need to sign the promissory note, and provide proof of enrollment and immigration status to receive your funds.
· No Application Fees. There are no application fees to apply for an international student loan. There is an origination fee if you actually receive the loan, but that amount is rolled into the loan amount and does not have to be paid out of pocket.
For more information on international student loans, visit InternationalStudentLoan.com
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A recent article in SmartMoney.com highlighted the potential time and money savings that US students, particularly future professionals, can realize by studying at a foreign university. Here’s an excerpt from that article:
NEXT YEAR, CHRISTOPHER SCHULLER, a native of Nashville, Tenn., will complete his law degree at Oxford University, and he’ll qualify to take the New York State Bar exam. Assuming he passes, he’ll become a practicing attorney at age 22. Schuller didn’t skip grades in high school or overload on his college coursework. Instead, he chose to attend college in England where most undergraduate programs — including law school — are three years long and where students begin their major on the very first day of classes.
“I knew since high school that I wanted to be a lawyer,” says Schuller. “Once I realized that the Oxford law degree could get me straight to the Bar exam, going there seemed like the obvious choice.”
In addition to skipping four years of traditional undergrad education, Schuller saved big bucks. Tuition for U.S. students at Oxford costs about $20,000 per year — or $60,000 to get a law degree. If Schuller had attended the University of Chicago, which was his first choice in the U.S., he’d pay more than $93,000 for an undergraduate degree, and then have to pay for a three-year J.D. to boot.
To read the rest of this story, click here.
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To read about Foreign Enrolled Loans, for US students like Christopher Schuller that want to study at foreign universities, click here.
A new study from the Higher Education Policy Institute warned that the UK is in danger of losing international students if nothing is done to contain and reduce tuition and costs. The UK is the second most popular destination for international students, behind the US, but its share of all international students worldwide has dropped from 16% in 1998 to 11% in 2004.
Unlike in many other EU countries, non-EU students are charged higher rates in the UK than students from EU countries. The HEPI report warns that as global competition for international students heats up, the UK should address this inequity if it wants to maintain its status as the second most popular destination. The report argues that UK taxpayers should subsidize the education of international students, just as it does for UK and EU students. The report also reviews all of the economic and non-economic benefits that international students bring to the UK.
Click here to see the full HEPI report.
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