A Guide to International Student Loans: How To Finance a US Education

In the 2023-24 academic year, the U.S. hosted a record high of 1.1 million international students, according to the Open Doors 2024 Report on International Educational Exchange. But while students from abroad comprise a large portion of the student population at schools in the U.S., they don't have the same options when it comes to accessing student loans.

Most domestic students in the U.S. turn to federal financial aid to pay for college, but federal loans generally are not available to international applicants. One option that international students do have is international student loans, which are private student loans offered by banks, credit unions, and other financial institutions.

What are international student loans?

International student loans are private student loans available to international students through various institutions and organizations, such as banks, credit unions, and online lenders. Funds from international student loans must be used for qualified educational expenses, such as tuition and fees, room and board, books and supplies, and necessary living expenses like meal plans.

Often, a student loan cosigner with strong credit who is a U.S. citizen or permanent resident is necessary to qualify for an international student loan, though some loans available for non-U.S. students do not require a cosigner.

Best international student loans with a US cosigner

Eligibility requirements for international student loans

Eligibility requirements for international student loans vary from lender to lender, but typical criteria include:

• You are not a U.S. citizen, U.S. permanent resident, or Deferred Action for Childhood Arrival (DACA).
• You are admitted to or attend an eligible U.S. institution or university, usually at least half-time.
• You have a valid student visa.
• You come from a qualifying country.

Additionally, many lenders require that international students apply with a cosigner, who will assume responsibility if the loan is not repaid. There are typically certain requirements the cosigner must meet as well, such as:

• Being a U.S. citizen or permanent resident
• Having an established credit history and satisfying minimum credit score requirements
• Meeting a certain income threshold and providing sufficient proof of income

Some lenders will work with students who do not have a cosigner, though they may have stricter eligibility criteria. Students in this situation may also consider asking their school about potential options for funding, such as lesser-known or alternative lenders. Or, you might seek out a loan from your home country in addition to options like scholarships and grants.

How to apply for an international student loan

Before you start the application process for an international student loan, it's important to shop around and compare your options, looking at factors like eligibility requirements, loan amounts, interest rates and fees, and repayment options.

From there, you'll generally have to go through the following steps to apply for an international student loan — though there may be some variation in the exact process from lender to lender:

1. Gather necessary documentation: This can include a copy of your student visa, verification of acceptance or enrollment in a U.S. college or university, a copy of your passport and other proof of identity, and educational transcripts and grades. You may also be asked to provide an estimate of your costs for studying and living in the U.S., which your school will need to certify.
2. Fill out the application: You can usually access a lender's application online through its website. Make sure to fill out each field and be as thorough as you can. If you're applying with a cosigner, you will also need to provide their information and certain documentation, such as proof of income.
3. Finalize loan details and receive funding: If your application is approved, you will need to finalize loan specifics, such as your repayment term. Once that's complete, your funds will be disbursed, usually directly to your school.

Alternatives to international student loans

International student loans are not the only funding option for students coming from abroad to study in the U.S. Other options that international students might explore include:

• Scholarships and grants: You don't have to be a U.S. citizen to access scholarships and grants, which, unlike loans, are funds that don't have to be repaid. Look to private, corporate, nonprofit, and government scholarship funds, and databases like InternationalStudent.com, which allow you to search for grants and scholarships for international students. It's also possible to find scholarships targeted toward residents of certain countries and regions.
• Work-study opportunities for international students: In some cases, international students may be able to access work-study opportunities through their university. Often, these are on-campus employment opportunities available only during the academic year. Still, payment for work-study can help cover costs related to school, as well as personal expenses.
• Financial aid from U.S. colleges and universities: While availability is dependent on the specific institution you are attending, some public and private universities and colleges in the U.S. do offer funding to international students. These opportunities can be in the form of scholarships, grants, fellowships, or assistantships.

Repayment options for international student loans

The repayment options available for international student loans will vary, depending on the lender. International student loans commonly offer the following repayment options:

• Immediate repayment: With this repayment option, loan principal and interest payments become due shortly after funds are disbursed.
• Interest-only repayment: This repayment arrangement allows students to make payments only on their loan's interest while they are enrolled in school, with at least half-time enrollment typically required.
• Deferred repayment: Students will not owe payments until they are either no longer enrolled in school at-least half-time or have graduated and their grace period, which usually lasts about six months, has passed. After that point, payments of principal and interest will become due.

The exact length of the repayment term can fluctuate depending on what your lender offers and what you have selected, though you may find repayment terms ranging from five to 20 years.

Depending on the lender, student loan deferment and forbearance may be available, which can allow you to postpone payments in the event of financial hardship.

Additionally, “planning ahead is crucial,” advises Dennis Shirshikov, adjunct professor of economics at the City University of New York. “International students should stay informed about their loan terms, including grace periods and repayment schedules. Setting up automatic payments can prevent missed deadlines, and monitoring exchange rates is important if repayments are made in U.S. dollars from abroad,” says Shirshikov, who notes that “it's also beneficial to establish a U.S. bank account to facilitate transactions.”