It is known that education in the United States is fee-paying: either for Americans or for foreign citizens. The practice of issuing educational loans to students and their parents has existed for a long time. This form of financial support for education is popular, since the average American family does not have enough money to pay for at least one year of study even in the cheapest college, not counting the costs of accommodation (if the student is studying in another city), food, textbooks and other necessary things. For foreign students, these amounts increase several times.
There are three forms of student loans in the US: federal student loan, parent loan, and private loan. Only one form of funding is available to foreign students – this is a private loan, which is called the Private International Student Loan.
Private International Student Loan
This is a special type of financial aid for students who are not citizens or permanent residents of the United States who wish to study at one of the US colleges or universities.
The loan is issued by investors and lenders, which can be banks. It is difficult to obtain such an educational loan, but it is possible if certain terms are met.
Requirements for obtaining a loan
The complete list of terms and requirements for a student applying for a private education loan may differ depending on the lender. However, there are a number of basic and mandatory terms that must be met when applying for a loan.
First, a prospective student over the age of 18 must not be a US citizen or resident when establishing credit. Secondly, the applicant must be admitted to the chosen college or university and have the appropriate confirmation of the university. He must also obtain a student visa and take out insurance.
One of the most important terms for all foreign students to get private financial aid is a sponsor. The surety plays an important role in the loan procedure, since this person assumes the obligation to pay the student’s debt if, after graduation, he cannot cope with financial obligations on his own.
Only a US citizen or a resident who has permanent residence in the United States for at least two years can act as a surety. In addition, he must have an official job and a good credit score. Finding a guarantor is one of the most difficult tasks that a foreign student will have to face.
Typically, this role is played by family members or relatives who are US citizens or residents. They can also be friends or family members.
The guarantor must prove his solvency and provide all the necessary information about himself (status, work, income), which will be entered in the loan application, and also sign this application on an equal basis with the borrower.
Also, to get financial assistance, you will need documents confirming the availability of any funds from the applicant himself. These can be bank deposits, salary (in case the applicant is working), income got from renting real estate, the total income of parents, and so on.
This issue should be taken into account especially carefully, since correctly selected documents and the student’s own funds not only increase the likelihood of a loan being approved by the bank, but can also slightly lower the interest rate.
Benefits of the loan program
Like all loans, a private loan is not gratuitous and is repayable with interest. But the system of private educational lending is quite flexible, and interest rates are lower than with a regular loan, which makes it possible to draw up a fairly convenient payment schedule.
There is also a deferred payment option. Moreover, not for one year, as in many federal loan programs, but for the entire period of study. This means that the borrower must pay the first loan payment shortly after graduation. Typically, the loan term for such a program is 10 years. Most lenders do not charge a prepayment fee if the graduate is able to do so.
In addition, unlike most grants and scholarships, a private educational loan is issued to cover the cost of both the training itself and the costs associated with it (accommodation, transport, teaching aids, etc.).