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An ever-growing number of U.S. students are taking up opportunities to study abroad according to the Institute of International Education. Year after year the numbers just keep rising, and they cover U.S. students enrolled full-time for their entire degree abroad, those taking a year or semester abroad, and U.S. students that do other related activities and short courses. If you’d like to join them but worry about funding this experience of a lifetime, we’ve got the answers to all your questions.
You have two main options- federal and private loans. Federal loans are granted through the U.S. government, while private loans are granted through a private institution such as a bank or other approved lender. Although we specialize in private loans, we will also cover federal loans because they can be a great way to fund your education - and this is where you should turn before you look at private loans.
You should first fill out a FAFSA, the Free Application for Federal Student Aid, to see what aid you are eligible for. Completing the FAFSA application will let you know if you’re eligible for these loans, grants or work-study funds.
U.S. citizens and eligible non-us citizens can complete the FAFSA. If you’re not sure if you qualify as an eligible non-U.S. citizens, go to the FAFSA website to double check your situation. There are multiple individuals who are eligible as non-us citizens, so please check. There are a few different types and your personal situation will determine which you are eligible to receive. We’re going to take a moment to explain the differences.
Direct Subsidized Loan: For eligible undergraduate students who demonstrate financial need to help cover the costs of higher education at a college or career school.
Direct Unsubsidized Loan: Open to eligible undergraduate, graduate, and professional students. Eligibility is not based on financial need.
Direct PLU.S. Loans: For graduate or professional students and parents of dependent undergraduate students to help pay for education expenses not covered by other financial aid. Eligibility is not based on financial need, but a credit check is required. If your parents want to help you pay for your education and need a loan- the PLU.S. loan is a good option.
Perkins Loan Program: No longer available. If you participated in this program you can learn more about managing your repayment by contacting your school or lender directly.
Benefits include:
For more information on these loan options see studentaid.gov, and you can complete the FAFSA here.
After you’ve explored your options of government-sponsored aid you might not have as much aid available to you as need. Maybe you missed the FAFSA deadline, or maybe you decided not to complete the FAFSA at all. In any of these situations, you still have the option to explore private study abroad loans. Private loans are just as they sound- a loan that is through a private lender, like a bank. Private loans are great if you’re trying to fill the gap in the last bit of aid that you need - you can borrow up to the total cost of your education, minus any other aid you’ll receive.
Benefits of private loans:
You can use our comparison tool to see what lenders are available to provide you with funding at your school.
Should I apply for federal loans or private loans?
You should always apply for as much in federal loans as possible before you resort to private loans. However, for our loans there is no need to complete a FAFSA.
All students must be a U.S. citizen or U.S. permanent resident who will be studying outside their home country through an approved U.S. school either at the undergraduate or graduate level. The student must receive credit at their home college or university. If you are not sure if your school is eligible, see the complete list of eligible schools. Your school must be accredited by an agency recognized by the United States Secretary of Education and be eligible to participate in federal student aid programs.
Students who are U.S. citizens or U.S. permanent residents directly enrolled in an eligible international school should look for a foreign enrolled loan.
If you are an international student looking to study in the U.S., please visit our international student page to find a suitable program. We do have programs for international students attending schools in the U.S. or Canada - students studying in their home country or in other destinations are not currently eligible.
While a cosigner is not required, applying with a U.S. cosigner may make it easier to obtain a loan and can also increase the chances of getting a better interest rate. A cosigner may join a student’s loan application. If approved, they are legally obligated to repay the loan if the borrower fails to pay.
Students who do not have a cosigner must have good credit and a long credit history. How this is assessed will vary from lender to lender.
The cosigner must be a U.S. citizen or U.S. permanent resident who has lived in the U.S. for the past two years. They must have a valid social security number and pass a credit check.
If you are not sure if your school is eligible, see the complete list of eligible schools. Your school must be accredited by an agency recognized by the United States Secretary of Education and be eligible to participate in federal student aid programs.
Visit Federal Student Aid for International Study to find eligible schools and further information.
No. Schools must be approved by the Department of Education to offer the private student loans discussed above.
If you will be studying abroad and need a loan to finance your studies overseas, you must receive credit at your home school. Your sending school must also appear on our eligible school list. If not, then we unfortunately do not have a loan program for you. We recommend contacting your school directly as they may know if there are any loan programs available to their study abroad students.
Unfortunately if there are no lenders that appear after you do the comparison tool, then we do not have a loan program for the school. Our best advice is to contact your school, as they should know if there are any loan programs available to their study abroad students.
Loans can be used for education-related expenses including tuition, books, fees, insurance, transportation, room and board, and other school-related expenses. You can borrow the total cost of your education minus any other financial aid you have received. Your school will certify the total amount you are able to borrow.
To determine your maximum loan amount, or what can be included in your loan, you will need to speak to your school’s financial aid office. After you apply and receive approval for you and your cosigner, your school must certify the amount of the loan.
When you take out a loan through a lender, you will be responsible for paying back the amount of money you borrowed (called the principal) plus an additional amount charged by the lender for the loan (called interest). The interest rate is calculated based on an index plus a margin that will add an additional percentage interest rate depending on your cosigner’s creditworthiness. The two most common indexes used for student loans are the Prime Rate and LIBOR Rate:
When evaluating the loan, the lender will clarify which index the plan uses. Then, there will be an additional margin that will be added to this index based on the borrower’s individual criteria, including the cosigner’s credit history. Based on their creditworthiness, an additional interest rate will be added to the index which will be the total interest rate you owe. This will appear on your final loan paperwork as Libor + 2.8%. The application is free, and when your application is approved, your specific margin will be disclosed to you. At that point you can accept or refuse the loan.
Repayment will depend on the loan option you choose. This is an important consideration since most students cannot work while they studying overseas and others may not want to have a job while completing their degree. Because of this, students will need to consider the cost of each monthly payment, when payments will begin, and how long students may be able to defer paying back the loan. The repayment period typically ranges from 10-25 years, however the larger the loan, the longer the loan repayment period. There are standard repayment plan options depending on the loan you select:
There are a few deadlines to complete the FAFSA: the federal deadline which is June 30th, the local deadline which will vary from state to state, and then your school might have a deadline also. So you will need to make sure you know and meet all three deadlines!
You may apply for a private loan at any time. There is no deadline. However, to ensure that you have the aid ready to use when you need it-know that the initial approval takes between 2 and 6 weeks.
Yes. You can reapply each academic term for a loan.
Disbursement dates are set by the school in accordance with federal regulations. The first disbursement date on a federal loan cannot be any earlier than 30 days before the first day of the loan period and schools will apply this principle to private loans, too.
If you are studying overseas, you should check current federal regulations affecting the cashing of student loan checks abroad. You can check the regulations at FinCEN.gov.