Financing an education can be a big challenge for an American student, and it can be an even more daunting task for someone coming from abroad. It doesn't help that international students must show they can support themselves fully for the entire time they intend to study before they are allowed to set foot on campus.
Tuition across the United States has increased in public institutions by more than 200% and almost 130% at private schools since the 1987-1988 academic year. In 2017-2018, a moderate U.S. college budget averaged $25,290 for an in-state public college and $50,900 for a private college, according to The College Board. The most expensive American colleges now cost more than $70,000 a year.
All students — American and international — should keep in mind that tuition simply covers the cost of what the college charges. This doesn't include books and supplies, food, housing, transportation and any other expenses they may incur while studying in the United States.
How to Find Funding
Like an American student, your first step should be to investigate scholarships and grants before looking for a loan. Apply for international student financial aid with your college, including teaching assistantships if you're a graduate student and the university has programs. Hundreds of U.S. colleges and universities offer financial aid to international students. There may also be schools that offer a stipend for resident dorm advisors. Depending on the languages you speak, some universities may hire you if the school features dorms designed so American students can acquire foreign language skills.
Next, research and apply for international student scholarships and grants, including any that your home country's government may offer. Then, determine how much you and your family can realistically afford to pay out of pocket.
Even with scholarships, grants and family funds, most international students still come up short. That's when it’s time to look into private loans. A variety of banks and other institutions offer international student loans for borrowers who meet certain standards, including the following:
You can easily apply online with most of these lenders for an international student loan.
You May Need a U.S. Co-signer
If you are not a U.S citizen or a legal permanent resident (LPR) with a Green Card, you’ll most likely need a U.S. co-signer on your international student loan application. The co-signer must be a U.S. citizen or LPR who has lived in the U.S. for the past two years. Because these loans are credit-based, your co-signer must have an income history and a good credit history.
By signing your loan documents, the co-signer agrees to take responsibility for repayment of the loan if you fail to pay in a timely manner.
Global Student Loan is one of the few international private student loan companies that does not require a U.S. co-signer.
Review Repayment Terms
Be sure to read the fine print about loan repayment. Although terms vary from loan to loan, the repayment period usually ranges between 10 and 25 years. Generally speaking, the larger the loan, the longer you’ll have to repay it.
While some loans allow you to put off payments until after graduation, others require that you pay interest while you’re still attending college. Still, others require that you start making payments on both the interest and principal of the loan immediately. You may be eligible for hardship extensions if you are unable to make payments for a short period of time. Be sure to ask your lender about these extensions.
Take an Interest in Interest Rates
With international student loans, interest rates are typically variable, meaning they will change over the life of the loan. The rates are usually based on either the LIBOR or prime rate — two indices that are constantly changing — plus a margin, so your interest rate will go up or down with them. Depending on your loan, there will be an additional margin based on certain factors, including the credit history of your co-signer and your chosen repayment plan. This is why it’s important to choose a U.S. co-signer with a good credit history. The better your co-signer’s credit, the better interest rate you’ll receive.
Customer Service Is Key
Look for a company where you can reach a live operator for as many hours during the day as possible. Expert customer service representatives will be able to answer all of your complex questions when you need support in tough financial times.
Some colleges provide a list of preferred international student lenders with contact information for reputable lenders they’ve worked with in the past. These recommended lenders usually offer the most competitive rates and superior customer service. Check out your school’s website or ask the college student aid office for a list. And check out Top Student Loan Providers for names to research.
The Bottom Line
Remember, you will have to show that you can fully support yourself during the entire period of study in order to study full-time in the United States. International students should first tap into financial aid, scholarships and family savings to fund the cost of college in the U.S. If you still don’t have enough to cover the full price tag, there are plenty of private international student loans available to you. Before you apply for a private loan, do your research and try to find the best deal from the most reputable lender. (See How to Score a Private Student Loan for more advice.)