The number of international students in the U.S. eclipsed 1 million for the first time in 2016, according to the Institute of International Education.
If you used these tips to successfully apply to college in the states, you probably already discovered that securing your student visa isn’t the last big hurdle.
Paying for school is.
On the bright side, there are private lenders offering student loans for international students attending college or graduate school in the U.S. Here’s what you need to know.
Student loans for international students
Without U.S. citizenship or a green card, international students are ineligible for federal student aid. So cross that solution off the list.
Say you’re holding an F-1 Visa but aren’t attending a school known to lavishly support its international students. You might have to resort to private loans.
The kicker is that most American lenders will need you to find a qualified co-signer. Qualified, as in a U.S. citizen or permanent resident.
At EDvestinU, for example, your co-signer must also have a strong credit history, an annual income of at least $30,000, and no bankruptcy or other big financial event in recent years.
“More often than not, it’s not a parent, but it is a relative [living in the U.S.],” said Rich Neilsen, the education loan program manager of New Hampshire Higher Education Loan Corporation, the parent of EDvestinU. “Everything else is pretty much the same.”
As is the case for American teens and twentysomethings, the student simply needs to be enrolled at least half-time at a degree-granting institution, Neilsen added.
MPOWER Financing further separates itself by offering what its CEO called “merit-based” loans. Manu Smadja told U.S News & World Report that his company considers dozens of variables when reviewing applicants, including test scores and salary-earning potential, before quoting an interest rate.
Application process for international student loans
The application process takes place online, but most international student loan lenders offer telephone support. You can start by completing a form that calls for information about you, your school, and your desired loan.
At Discover, for example, you’ll be asked for:
- School information: Major and dates of enrollment
- Loan information: Amount requested and other financial aid
- Financial information: Income and monthly mortgage or rent payments
- Personal information: Permanent address and temporary or in-school address
Some lenders request additional details. MPOWER Financing, for example, asks how you’ll use your loan. You could check boxes next to:
- University housing
- Health insurance
- Meal plan
- Other school bills
Depending on the lender, you might upload your documents during this initial application or after you’ve been approved. At EDvestinU, for example, you would send along a copy of your country’s passport for a background check. Your lender might even check your name against watch lists, Neilsen said.
U.S.-based lenders also often require a copy of your visa or other documentation, such as your Form I-20.
At Prodigy Finance, you would receive a provisional offer within five days of submitting your application. Then you’d be asked to upload documents, such as your college admission letter, to verify your application.
Before you’re approved and funds are sent to your school, the entire process could take one to three weeks, at least at MPOWER Financing.
Finding the right lender for international student loans
A Prodigy Finance spokeswoman said that 82 percent of the lender’s borrowers have no alternative funding options. This is because it caters to students in 150 different countries and doesn’t require a co-signer.
But not all lenders are so open.
So the first step in finding the right lender for you is ensuring you’re eligible at all. The factors that might disqualify you include:
- U.S. school
- Major or degree program
Aside from whether you might need a co-signer to complete your application, it’s important to consider what kind of lender works best for you.
You might want to consider the pros and cons of taking out a student loan with a big bank like Discover, SunTrust Bank’s Union Federal, and Citizens Bank. Each offers international student loans.
You’ll also want to make a side-by-side comparison of these lenders, big and small, looking at the following factors:
- Fixed and variable rates
- Aggregate loan limits
- Grace period
- Deferment and forbearance options
- Repayment term lengths
Columbia University offers characteristics of four lenders to help international students find the lender that’s right for them.
Before you take out an international student loan
Before resorting to a U.S. private loan, search for scholarships, grants, and fellowships. You won’t have to pay them back. Believe it or not, the state department is a good resource for gift aid for international students.
If taking out a loan becomes a necessity, survey options in your own country. If you’re from India, for example, compare the international student loans offered by HDFC Credila Financial Services to the quotes you receive stateside.
Consult your school’s financial aid office early and often during this process. When it’s all over and the funds finally arrive on campus, you can move onto more important things — like exploring how much off-campus housing could save you.
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