Finance for studying abroad: What you need to know

January 3rd, 2024 by IEFA

Studying abroad can be a life-changing experience, opening up countless opportunities for personal growth, academic enrichment and cultural immersion. However, financing this adventure can sometimes seem like a daunting task. But have no fear! In this blog post, we’ll guide you through the essential steps to make your study abroad dreams a reality. From understanding federal and private student loans to exploring alternative funding options, we’re here to help you navigate the world of finance for studying abroad and make informed decisions every step of the way.

Key takeaways

  • Understand federal and private student loans to finance your study abroad experience.
  • Research top lenders, explore scholarships/grants and utilize university financial aid.
  • Prepare for the loan application process, disbursement and repayment.

Understanding federal and private student loans for studying abroad

Federal and private student loans have benefits and limitations, and understanding these distinctions can help you make informed decisions about which loan options best suit your needs. In general, federal loans tend to offer more favorable terms, such as fixed interest rates and more flexible repayment options. On the other hand, private loans can provide additional funding beyond what’s available through federal aid and may come with higher interest rates and stricter repayment terms.

Let’s delve deeper into each of these loan categories and explore their unique features and benefits.

Federal student loans

Federal student loans are an excellent resource for eligible U.S. citizens. They are available through your university’s financial aid office and are need-based, meaning they are awarded based on your financial situation. One of the main advantages of federal loans is their fixed interest rates which are more predictable and stable compared to variable rates offered by many private lenders.

To apply for federal student aid, start by filling out the Free Application for Federal Student Aid (FAFSA). Your FAFSA form will determine your eligibility for various federal student aid programs, including subsidized and unsubsidized loans.

Keep in mind, federal student loans may not cover all your education expenses while studying abroad. The maximum loan amount you can receive will depend on many factors including your financial need and the cost of attendance at your chosen foreign university. Your loan amount may also might include your status as a dependent or independent student. 

Exhausting your federal aid options before seeking out private loans can save you money on interest and fees in the long run. It may even open up possibilities for loan forgiveness programs if you plan to pursue a career in public service.

One important factor to consider is that federal student loans are not available for international students (non-U.S. citizens) studying in the U.S.

Private student loans

Private student loans can be an excellent supplement to federal aid when studying abroad, especially if you’ve already maximized your federal borrowing limits or do not qualify for federal loans. Unlike federal loans, private loans are offered by banks, credit unions and other financial institutions. Their approval is often based on your credit history or other factors depending on the lender. This means you may need a cosigner with good credit to help secure a private loan if you don’t have a sufficient credit history yourself. Loans that do not require a cosigner are also available from some lenders – find out if you are eligible for a loan without a cosigner with our loan comparison tool.

Private student loans can potentially bridge the gap between federal aid and your total education expenses, but it’s important to be mindful of some factors. Private loans may have higher interest rates than federal loans. They may also have less flexible repayment terms. Additionally, private loans typically do not offer the same loan forgiveness programs available for federal loans. Therefore, it’s essential to carefully weigh the pros and cons of private loans and consider them as financial aid options.

Top lenders for study abroad loans

 The top lenders for private study abroad loans are:

  • MPOWER Financing.
  • College Ave.
  • Sallie Mae.
  • Ascent.
  • Discover.

Each lender offers different terms and conditions, so it’s essential to carefully review and compare their offerings.

For example, College Ave is known for its flexible repayment terms, ranging from five to 15 years. It also has a quick online application process that takes less than five minutes to complete. MPOWER Financing offers loans specifically designed for international students studying in the U.S. without a cosigner, making it an attractive option for many.

Our loan search tool takes the research time out of your search – see what lenters you’re eligible to apply for in less than 10 seconds. 

Financing your study abroad experience without loans

Although student loans serve as a valuable resource for funding your study abroad adventure, there are other options. Scholarships, grants and university financial aid are all excellent avenues to consider. By tapping into these resources, you may be able to significantly lower your education expenses and minimize the amount of debt you need to take on.

Scholarships and grants

Scholarships and grants are a fantastic way to finance your study abroad experience without relying solely on loans. There are need-based, merit-based or diversity-based awards, depending on the specific scholarship or grant. Some scholarships are awarded based on academic achievements, while others may be geared toward students with specific interests, backgrounds or fields of study.

To find and apply for scholarships and grants, research opportunities through your university, as well as external organizations and websites such as IEFA offers a comprehensive list of study abroad scholarships for students from various backgrounds and fields of study. Keep in mind that scholarship applications often require a significant amount of time and effort, so be prepared to invest your energy in crafting a standout application that highlights your unique strengths and qualities.

University financial aid

Your university’s financial aid office can be an invaluable resource. In addition to providing guidance on the various types of aid, it can assist you with the application process. 

Your university’s financial aid office may also offer additional resources, such as financial planning tools and budgeting advice, to help you manage your education expenses while studying abroad. 

Navigating the study abroad loan application process

It’s essential to take proactive steps to ensure a smooth and successful loan application experience. That includes preparation and understanding eligibility requirements. In the following sections, we’ll provide you with practical tips and insights on how to prepare for the study abroad loan application process, including advice on cosigner requirements and what to expect throughout the application journey.

Preparing for the application

Prior to embarking on the loan application process, it’s important to establish a solid foundation for a successful application. Here are some steps to follow:

  1. Maintain good academic standing, as this can demonstrate to lenders that you’re a reliable borrower.
  2. Take the time to research your study abroad program, considering factors such as location, length and program type.
  3. Understand the costs associated with your chosen program to inform your financial planning.

Another critical step in preparing for your study abroad loan application is reaching out to your university’s financial aid office. Financial aid officers can provide valuable guidance on the types of loans available, as well as assist you in navigating the application process. 

Cosigner requirements

Cosigner requirements for study abroad loans can vary, but in general, having a U.S. cosigner with a good credit history can significantly improve your chances of loan approval and securing better loan terms. A cosigner is typically a U.S. citizen or permanent resident who agrees to take on the responsibility of repaying your loan if you are unable to do so.

Without sufficient credit history yourself, it’s important to engage a potential cosigner well before your loan application deadline. This allows ample time for them to review their financial situation and consider whether they’re willing and able to support you in this capacity.

If you’re looking for a lender use our loan search tool to quickly find one! 

Managing repayment after studying abroad

After successfully securing funding, maintaining your loan repayment obligations becomes paramount. Managing repayment after studying abroad involves:

  • Understanding the repayment plans available to you.
  • Exploring loan forgiveness programs if applicable.
  • Ensuring you stay on top of your payments to avoid falling behind on your loans.

The upcoming sections will address different repayment plans and loan forgiveness programs.  

Repayment plans

Repayment plans for study abroad loans will depend on the specific loan you’ve chosen, whether it’s a federal or private loan. Options for repayment may include:

  • Standard repayment: This is the basic type of loan repayment where you pay a fixed amount every month for a set period, usually 10 years. It’s straightforward but may require higher monthly payments.
  • Extended repayment: This plan stretches your loan repayment over a longer period, typically up to 25 years. This means smaller monthly payments, but you end up paying more in interest over time.
  • Graduated repayment: With this plan, your payments start low and increase over time, usually every two years. It’s designed for people who expect their income to grow in the future.
  • Income-driven repayment: This is a flexible plan where your monthly payments are based on your income. If your income is low, your payments could be very small.
  • Pay-as-you-earn repayment: This is a type of income-driven repayment where your monthly payments are generally a set percentage of your discretionary income.

Each option offers its unique advantages and disadvantages.

For example, standard repayment involves fixed monthly payments over a period of 10 years, providing predictability and stability in your repayment schedule. On the other hand, income-driven repayment plans allow you to make payments based on your income, ensuring that your monthly payments remain manageable even if your financial situation changes.

Loan forgiveness programs

Loan forgiveness programs can provide relief from student loan debt for borrowers who work in specific fields or meet certain eligibility criteria. These programs typically require that you work in a qualifying field, such as nursing or teaching, and often involve work done in underserved areas or with populations in need.

Examples of loan forgiveness programs include Income-Driven Repayment (IDR) Forgiveness, Public Service Loan Forgiveness (PSLF) and Teacher Loan Forgiveness (TLF). By researching and understanding the eligibility requirements for these programs, you may be able to secure partial or full forgiveness of your study abroad loans, reducing your overall debt burden.

Tips for choosing the right study abroad program

Choosing the ideal study abroad program requires consideration of several factors, including location, program length and the type of program that aligns best with your academic and personal aspirations. In addition to these considerations, it’s essential to understand the financial implications of your chosen program. Factors like tuition fees, living expenses and available scholarships can all play a role in determining the overall cost of your study abroad experience.

Some of the most sought-after study abroad destinations offer excellent quality of life, but may come with a higher cost of living. Researching and comparing different study abroad programs can help international students find the best fit for their preferences and budget.


Studying abroad can be an incredible, life-changing experience. Understanding the various financing options available to you will help you move toward your goals without being overwhelmed financially.

Remember to thoroughly research and compare loan options, seek guidance from your university’s financial aid office and explore alternative funding opportunities to minimize your reliance on loans. With the right preparation and commitment, you can make your study abroad dreams a reality and create memories that will last a lifetime.

Frequently Asked Questions

How do people afford to study abroad?

You can make studying abroad affordable by applying for scholarships and grants and getting help from your financial aid office. Scholarships and grants can help you cover tuition fees, travel expenses and even living costs. Even small, niche scholarships can make a difference in funding your education abroad. 

How does studying abroad help you financially?

Studying abroad can give you a unique set of skills and experiences that might give you an edge in the job market.

Can I get student loans for study abroad?Yes, you can definitely get student loans for studying abroad! Don’t let lack of financing stand in the way of this incredible opportunity – explore your options today by finding and comparing loans!

Other Interesting Posts:

Finding financial aid: Your guide to scholarships, grants and student loans for international students

October 26th, 2023 by IEFA

Studying abroad offers countless opportunities for personal and professional growth, but financial constraints can hold many students back. Fear not, future global citizens! In this blog post, we’ll guide you through the world of finding financial aid for international students, exploring scholarships, grants and student loans to make your dream of studying abroad a reality. 

Understanding financial aid options

Four primary options exist for college students seeking financial assistance to study in the U.S.:

  • Scholarships.
  • Grants.
  • Federal student loans.
  • Private student loans. 

Bear in mind that federal student loans are not available for international students, but don’t worry – there are still plenty of resources at your disposal.

What students need to know about each resource in a nutshell: 

  • Scholarships are typically awarded based on academic merit or financial need and are not paid back. 
  • Grants are typically based on need and do not need to be repaid. 
  • Federal student loans are available to U.S. citizens and permanent residents and need to be repaid. 

Let’s dive deeper into each option. 


Scholarships are like the golden ticket of financial aid. They’re merit-based or need-based awards that don’t require repayment. With thousands of scholarships available globally, your chances of finding the perfect fit are quite promising. IEFA (International Education Financial Aid) is a free online resource that can serve as your faithful companion in the quest for scholarships. By creating a profile on IEFA, you can discover a plethora of scholarship opportunities, ensuring you don’t miss out on any potential financial support.

Not only does IEFA simplify the scholarship search process, but it also provides access to information on international student loan options. So whether you’re a high school student looking to fund your undergraduate studies or a graduate student seeking assistance for your master’s or doctoral program, IEFA has got you covered.


Grants are need-based forms of financial assistance that don’t need to be repaid as long as the grant’s requirements are met. While eligibility requirements for grants vary depending on the provider, they’re generally awarded based on financial need, academic merit or a combination of both. The application process may involve filling out forms, submitting documentation such as transcripts and financial statements and providing letters of recommendation.

Keep in mind that grants are usually awarded on a one-time basis and may not be renewable. Additionally, grants often come with specific stipulations, like maintaining a certain GPA or completing a set number of community service hours. However, the extra effort required to secure a grant can be well worth it, as they can significantly reduce your financial burden.

Federal student loans (not available for international students)

Federal student loans are government-funded loans that offer favorable terms, such as fixed interest rates and income-driven repayment plans. However, these loans are not available to international students, as they’re reserved for U.S. citizens or eligible noncitizens.

Don’t be disheartened! There are alternative options available for international students, which we’ll explore in the next section.

Private student loans

Private student loans are offered by banks and other financial institutions with terms and interest rates that can vary significantly. These loans are designed to bridge the gap between the cost of education and the financial aid received from scholarships, grants and federal loans.

For international students, obtaining a private student loan often requires a U.S. cosigner with a good credit history. This cosigner acts as a guarantor, taking on the responsibility of repaying the loan in case the borrower fails to do so.

Fortunately, there are private loans of up to US$100,000 that do not require a cosigner or collateral. You can check your eligibility for a no-cosigner and no-collateral loan using our international student loan eligibility checker


Your school might allow you to work part time right on campus to supplement your income. This can be a great way to earn some money to help pay for school expenses. Plus, you’ll get real work experience at the same time. To find out if your school offers this, check out their official website or speak to the financial aid office. Remember to make sure your visa allows you to work.

Can an international student get financial aid?

While international students aren’t eligible for federal financial aid, there are other types of financial aid available. To secure the best possible financial aid package, it’s essential to start researching early, use online resources and consult your school’s financial aid office.

Research financial aid options early

Starting your financial aid research early can provide you with a competitive edge in the race for funds. By familiarizing yourself with the various financial aid options well in advance, you can ensure you don’t miss any deadlines and give yourself ample time to gather the necessary documentation.

Early research also allows you to identify and apply for a wider range of college scholarships and grants, increasing your chances of securing the funds needed to attend your dream graduate school.

Use online financial aid resources

In the digital age, a world of financial aid opportunities and free visa support letters is just a few clicks away. Online resources like Fastweb and eduPASS can help you discover scholarships and grants specifically tailored to international students. These platforms allow you to search for financial aid based on factors such as nationality, field of study and level of education.

Consult your school’s financial aid office

Your school’s financial aid office can be an invaluable resource in your quest for financial assistance. These offices can provide detailed information about the various types of financial aid available at your school, as well as guidance on the application process and eligibility requirements.

Additionally, they can inform you about any school-specific scholarships or grants that may be available to you. 

Maximizing financial aid awards

Now that we’ve explored the various financial aid options available to international students, it’s time to discuss strategies for maximizing your awards. In this section, we’ll cover tips for comparing financial aid offers, participating in work-study programs and budgeting wisely to ensure you make the most of your financial aid package.

When comparing financial aid offers, it’s important to consider the total cost of attendance, including tuition, fees, room and board and other expenses. Additionally, you should look at the types of aid offered, such as grants.

Compare financial aid offers

When you receive financial aid offers from different schools, it’s important to carefully compare them to make an informed decision. 

As you compare, assess the:

  • Total cost of attendance.
  • Amount of financial aid offered.
  • Specific terms of each loan, such as:
    • Interest rates.
    • Grace periods.
    • Repayment plans.

By taking the time to thoroughly evaluate each offer, you can make a judicious decision that best suits your financial needs and long-term goals.

Consider work-study programs

Work-study programs offer a unique opportunity for college students to earn money for their education while gaining valuable work experience. These programs, often offered by universities and colleges, provide part-time jobs on or off campus that can help cover various college expenses.

By participating in a work-study program, graduate students can not only reduce their reliance on student loans, but also enhance their resume and develop essential skills for their future career.

Use budgeting and saving tips

Effective budgeting and money-saving practices can significantly impact your financial well-being during your international education journey. Start by creating a realistic budget that accounts for essential expenses, such as tuition, housing, transportation and groceries. Look for ways to cut costs, such as utilizing student discounts, buying used textbooks and cooking meals at home instead of dining out.

In addition to budgeting, it’s important to develop good saving habits. Set aside a portion of your income from part-time work or work-study programs for emergencies and unexpected expenses. By maintaining a healthy balance between spending and saving, you can minimize your reliance on student loans and set yourself up for financial success in the future.


Securing financial aid as an international student may seem like a daunting task, but with the right resources and strategies, it’s possible to overcome financial barriers and make your dream of studying abroad a reality. Resources include: scholarships, grants, private student loans and work-study programs. Remember to start your research early, compare financial aid offers and practice sound budgeting and saving strategies to maximize your financial aid awards. Now, go forth and conquer the world of financial aid – your international education adventure awaits!

Frequently Asked Questions

How do I figure out my financial aid?

Figuring out your financial aid is a multistep process. First, start by reviewing the college’s cost of attendance and understanding your expected family contribution. Then, check your award letter to understand how much money you are receiving from the college, the state and the federal government in the form of grants, scholarships and/or loans.

Finally, research other sources of financial aid such as scholarships and grants to help fund your education.

What are the four types of financial aid?

Financial aid for college or career school can be divided into four main categories: scholarships, grants, loans and work-study. These are all important sources of funding that students should consider when planning their education and finances.

Scholarships are not repaid and are typically awarded based on academic merit or other criteria, such as community service or leadership. Grants are typically based on need and generally are not repaid. Loans are borrowed money that must be repaid, and work-study allows you the opportunity to earn an income to help pay for expenses. 

Other Interesting Posts:

IEFA logo
Thank you for visiting
Providing information about international financial aid & scholarships since 1998
2024 MPOWER Financing, Public Benefit Corporation
1101 Connecticut Ave NW Suite 900, Washington, DC 20036