Can an International Student Take Out Loans for College?

Did you receive a scholarship from a US college or university? Consider yourself fortunate; everyone loves free money! For many college students and their families, education loans are part of the paying strategy. Loans are not free money. If you are an international student and regular reader of our blog, you already know that there are certain types of financial assistance that you will not be eligible for if you decide to pursue a US degree. What about loans? Can they be part of your paying strategy if you don’t receive enough in scholarships or haven’t saved enough to cover your education? Given the reality that student loans are a big part of how families are covering college costs today, we wanted to explore the options available to international students. Start Your Research At Home We encourage international students to check with their home country for any loan resources that can be used in the US. Your home country’s Ministry of Education should have information on all resources available for study in other nations. Additionally, international students can contact their local Education USA office (educationusa.state.gov) to learn more about loan programs designed to help cover costs of a US degree. Some examples of countries that offer education loans to students:

• Each Canadian province has an education loan program (collectively called the Canada Provincial Loans Program) and many of the provinces allow these loans to be used in the US.
• El Salvador allows students to use funds from ABANSA (Banca Salvadoreña) and Banco Hipotecario for overseas study.
• CSN, The Swedish Board of Student Finance, offers loans to full-time students who are enrolled in a degree program.
• Probably the most generous loan program of the Scandinavian countries, the Norwegian Loan Fund allows Norwegian citizens to take their education loan monies overseas.
• The Indian government also has a student loan program which covers all types of curriculum, including professional courses in schools and colleges in India and abroad. Pradam Mantri Vidya Lakshmi Karyakram provides students a single-window electronic platform for educational loans and scholarships, while Pado Pradesh provide loans for underserved students belonging to minority communities in India.

Private Loans and Co-signers The reality of needing a co-signer or co-borrower can be a major stumbling block for those hoping to study overseas. International students who wish to obtain a loan from a US bank are typically required to have an eligible co-signer who will be responsible for repayment of the loan should the student fail to do so. Family members or close family friends who are US citizens or permanent residents most often take on this role. Borrowing without a co-signer is a bit tricky and you will have fewer lenders to choose from. Additionally, the interest rates and other terms on the loans you are able to secure may be less favorable. Here are some private lenders to help you get started on your research:

• MPower Financing offers loans to international students enrolled in undergraduate or graduate programs who are within two years of graduating.
• Prodigy Finance offers loans to students pursuing law or business degrees.
• Stilt, a lender that bills itself as helping “immigrants and the underserved,” includes international students among its list of eligible borrowers.

International students may also consider applying for private loans offered by banks in their home country. Most lenders have an approved school list so you can verify if funds can be used at the US institution you plan to attend. Institutional Loans Some US universities—typically selective private schools (e.g., Carnegie Mellon, Tufts, Columbia, Harvard, and others)—offer institutional loans to international students. These loans come from the college’s own funds and terms vary. Students typically must exhaust all other eligibility and resources first before utilizing this type of loan program. Check with the Financial Aid Office at your prospective college to see what may be available. What You Aren’t Eligible For As a reminder, international students are not eligible to borrow from the US direct federal loan program. This type of financial assistance is restricted to US citizens and permanent residents. Certification of Finances As part of the process of applying to a university in the US, students must demonstrate adequate proof of finances. These documents are required in order to obtain the appropriate paperwork to secure a student visa. In addition to recent bank statements, signed bank letters verifying the ability to pay educational expenses, and investment accounts, student loan documentation may be submitted as evidence of financial support. The latter is only acceptable if the funds are from reputable lenders who are willing to provide a letter showing a commitment and final approval of funds. Be sure to check with each university on what is considered acceptable documentation. While most international students need to personally finance a large portion of their education, you can see there are multiple education loan resources to consider. The sooner you sit down with your family to work out your budget for studying in the US, the more confident you will be in the college admission and finance process. Good luck!