Studying in the U.S. as an international student is a big expense. Even though students need to prove that they have ample finances before they begin school, there are times when they may need some extra funds. Some private lenders offer student loans for international students to help them complete their education. Learn what you should keep in mind if you’re an international student considering student loans.
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Find the Best Student Loans for You
SoFi is an online lender founded by Stanford business school students in 2011. Originally focused on student loan refinancing, the San Francisco-based company added private student loans in 2019. Choose from undergraduate, graduate, law or MBA, health profession, or parent loans with no fees.
Ascent Funding is an online lender offering undergraduate and graduate student loans for those with or without a co-signer at more than 2,200 eligible schools nationwide. Students who are not U.S. citizens or permanent residents or those with Deferred Action for Childhood Arrivals status – aka “Dreamers” – may apply for an Ascent loan. Ascent Funding was founded in 2015 and is based in San Diego.
Citizens Bank was founded in the late 1800s in Rhode Island. Today, it’s one of the largest commercial banks in the U.S. Branches are concentrated in the New England, mid-Atlantic and Midwest regions.
MPower Financing offers private student loans to undergraduate and graduate students within two years of earning a degree or starting a one- or two-year program at an eligible U.S. or Canadian school. The lender specializes in working with international students and Deferred Action for Childhood Arrivals recipients.
Sparrow, founded in 2020, is an online marketplace where students and parents can fill out a single application to see whether they qualify for loan offers from a variety of lenders. Although Sparrow is not a lender, the free service allows you to compare rates across lending partners. Sparrow is also available to international students.
Best for no fees
Discover Bank has been operating for more than 100 years, and since 2010, it has offered private student loans to students attending more than 2,400 colleges and universities. Loans of up to 100% of education costs with fixed or variable rates are available.
Best for small loan amounts
EDvestinU is the nonprofit student loan lending and refinancing organization of the New Hampshire Higher Education Loan Corp. Undergraduate and graduate loans and student loan consolidation are available to borrowers with both fixed and variable rates available in select states and Puerto Rico.
Best for online service
London-based Prodigy Finance offers postgraduate student loans for qualified borrowers from about 150 countries who plan to study as international students at one of more than 850 schools across 18 countries. Students from the United Kingdom can also get loans from Prodigy Finance to study domestically. Since its founding in 2007, Prodigy Finance has provided funding to more than 20,000 students.
Unlike U.S. citizens or eligible noncitizen students, international students do not have access to federal student loans, and scholarship opportunities are scarce. If you’re an international student who needs to borrow money to fund your studies and living expenses, you may need to turn to private lenders that specialize in student loans for international students.
You must use international student loans for education-related expenses including the cost of attendance, room and board, books and insurance.
Unfortunately, there aren’t a vast array of options for these loans. Because international students must complete the College Board’s Certification of Finances form, they attest that they have the funding available to pay the tuition, fees and other living expenses associated with their program. “That process in and of itself makes it so that the demand for loans for international students isn’t as high as for domestic students,” says Kenneth Ferreira, associate vice president for student financial services at Franklin Pierce University.
That said, circumstances sometimes change, which may cause international students to be short on cash. Student loans for international students can help people in those situations complete their studies.
Find the Student Loan That’s Right for You
There are a few basic requirements for getting an international student loan:
- You are not a U.S. citizen or an eligible noncitizen, which includes permanent residents, U.S. nationals and those who have T-1 status or a Form I-94.
- You are enrolled at least part time in an educational program at an eligible college or university. “Typically, the university or college will have a role in certifying the loan for the lender,” says Ferreira. The institution confirms the cost of attendance and the enrollment period, for example.
- You have an established credit history or a creditworthy co-signer. Lenders mostly base private student loan approval on creditworthiness. The challenge then becomes that international students do not have a credit history in the U.S. or parents in this country who can borrow on their behalf. So, most lenders require a co-signer for the loan who is a U.S. citizen or eligible noncitizen.
“The co-signer would need to have acceptable credit scores and credit history,” says Kevin Towns, director of financial aid at North Central College. That way, if the student does not repay the loan, the co-signer pays the debt.
The co-signer doesn’t have to be a family member, but because that person will be on the hook for the debt, it should be someone with close ties to the student, says Towns. He or she must also have lived in the U.S. for at least two years and have strong credit.
Other factors that could affect approval decisions or interest rate offers may be subjective. For instance, some lenders might consider the school, the type of degree, and sometimes the program of study or the student’s home country. From the lender’s perspective, the student’s earning potential can help predict the student’s ability to handle the repayment, says Towns. This is especially true of the small number of lenders that allow student loans for international students without co-signers.
- Private student loans may give international students a way to cover college expenses.
- Most lenders require a creditworthy co-signer, which can be hard to find as an international student.
- These loans may come with high interest rates, making them expensive to repay over time.
International students do not have the same number of lenders from which to choose as U.S.-based students do, but it still pays to check the few available options. Because students may not be familiar with lender terminology and the loan process, Ferreira recommends that they work with their college’s financial aid office for help deciphering the terms and conditions. “They vary from lender to lender, but typically terms and conditions involve any interest and fees associated with the loan,” he says.
Some items to compare between different international student loan providers include:
- Interest rate: It’s important to check the rate and whether it’s variable or fixed. Variable rates may sometimes start out lower, but they will change from year to year and not necessarily in your favor. “If there is an option to choose fixed, that’s always a good thing to consider,” says Towns.
- Repayment requirements: Some lenders may require repayment of interest or a complete payment each month beginning right away while the student is still in school. Others allow borrowers to defer all payments until after graduation. And some may let the borrower choose.
- Term: Lenders may allow borrowers to choose between different term lengths. You should compare the monthly costs of each option to see which one is affordable, as well as consider the total cost over the life of the loan. The longer the term, the more it will cost in the long run, but payments for shorter-term loans will be higher.
- Hardship options: Find out if the lender offers any programs such as forbearance, which allows you to pause payments if you have a temporary financial setback or become unemployed.
- Discounts: Some lenders may offer an interest rate discount for borrowers who enroll in automatic payments or who make a certain number of consecutive payments on time.
- Co-signer release: Though this is unusual for international student loans, certain lenders may offer an opportunity to release the co-signer from his or her obligation. Typically, this requires you to become a citizen or permanent resident, as well as complete a certain number of consecutive on-time payments.
Refinancing international student loans is possible, but tricky. You usually need to have an established credit history and a reliable income – both of which may be a challenge for international students to prove.
If a couple of years go by and you can establish credit as a U.S. citizen or permanent resident, then it is more likely that you will be able to refinance your existing student loans on your own. Otherwise, just like with most student loans for international students, lenders will require you to have a U.S.-based co-signer to refinance your loan.
Refinancing student loans can be a good option for some borrowers as it consolidates multiple loans into one loan payment. Another reason to explore refinancing is to see if you qualify for a better interest rate or to lower your monthly payment. Like all financial issues, it’s important to crunch the numbers to see if a new loan would be beneficial.
Besides private student loans, international students studying abroad in U.S. colleges may be able eligible for scholarships, grants and fellowships. Here are a few alternative ways that international students can pay for college in America:
- Foreign student aid from the college itself. Many prominent universities – including Duke, Columbia and Yale – have grant funds set aside to help international students cover the cost of tuition. Get in touch with your university’s financial aid office to see if they offer any such programs.
- Study abroad scholarships from your home country. If you can’t get financial aid from an American college, some foreign countries offer grants and scholarships to help their citizens pay for college abroad
- International financial aid from third-party organizations. Several international organizations, such as the Fulbright Foreign Student Program and the Open Society Foundations, offer student aid for noncitizens studying abroad in the United States.
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