Things to Know About Your Lender
Whether you plan to study in the U.S. for a single semester or intend to complete your degree in the U.S., be prepared for high tuition fees. The average cost of tuition and fees for one year at a public university in the U.S. in 2022 was US$28,240 for out-of-state and international students, according to The College Board, a non-profit organization focused on higher education.
With such a hefty price tag, many international students turn to scholarships then look to take out an international student loan to cover some of the cost. But before you sign on the dotted line of the loan agreement, make sure you do your homework and understand the terms and conditions.
4 Things to Know Before Applying for an International Student Loan
If you need a student loan for study abroad programs or to pay for graduate school, there are multiple loan options available. Here are four critical pieces of information about student loans for international students that you should know:
1. Eligibility Requirements Vary By Lender
Private student loan companies set their eligibility criteria, and requirements can vary by lender.
- Citizenship: Many lenders often require students to be U.S. citizens or permanent residents to qualify for a loan; international students are excluded. Some lenders will issue loans to international students if they have a cosigner that meets the lender’s citizenship requirements. And some lenders, such as MPOWER Financing, offer loans for international students that do not require a cosigner or collateral.
- Credit: As a student loan applicant, you generally need to have good to excellent credit. If you don’t meet that criteria — or don’t have any credit history at all in the U.S. — it can be hard to qualify for a loan. However, there are some lenders that look at your future earning potential rather than your credit to determine your eligibility.
- Enrollment: Lenders often have enrollment requirements. For example, a lender may require an applicant to be enrolled at least half-time to qualify for student loans.
2. Lenders May Only Work With Certain Schools
Lenders that lend to international students usually only approve applicants that attend certain schools. For example, lenders may only issue loans to students that are completing degree programs at leading four-year colleges and universities. Lenders will have varying factors when deciding on approved schools, a few items could include the universities’ graduation rates, employment rates and graduate salaries.
If you want to attend a school that falls into the non-approved school list, you may have to find alternative financing options.
3. Some Lenders Require Cosigners
As a college student, you may not have the income or credit history required to qualify for a loan on your own. And some lenders refuse to lend to international students that apply by themselves.
In either case, you may need a cosigner — a relative or friend with good credit — that is a U.S. citizen to apply for a loan with you. If you miss payments, the cosigner is responsible for making them, so adding a cosigner decreases the lender’s risk. As a result, they’re more willing to work with you.
Not all lenders require a cosigner — MPOWER offers non-cosigned loan options for international students — but some do. It’s a good idea to find out if a cosigner is necessary before submitting a loan application.
4. There May Be Limits on How Much You Can Borrow
Student loan lenders often limit how much you can borrow per year and over your lifetime. Intended to prevent students from racking up more debt than they can afford, these limits vary by lender and type of loan.
For example, MPOWER allows international undergraduate students to borrow up to US$50,000 per year, and up to US$100,000 over their lifetime.
When shopping for a loan, consider how much money you need for your program. If you reach a lender’s limit, you may need to consider other financing options like scholarships and grants for international students.
Get More Information About Student Loans
Whether you need a student loan for study abroad programs or to complete your master’s, it pays to research available options and learn the fundamentals of student loans before selecting a lender.
For more information about student loans, check out this guide on getting student loans for upcoming semesters in the U.S.
