Tips for Comparing International Student Loans and Frequently Asked Questions
Tips for Comparing International Student Loans
In general, international students must have a U.S. citizen or permanent resident co-signer to get a private student loan. There are a few lenders that don’t require one, but funding from these lenders is limited for the 2020-21 school year, due in some cases to restricted investor activity during the coronavirus crisis. Continue to check our list, as we will add lenders that meet our criteria as they restart or expand student lending in 2021.
Federal financial aid often is the better option for students. But federal student loans are limited to U.S. citizens and eligible non-citizens, which include:
· U.S. nationals, including natives of American Samoa and Swains Island
· U.S. permanent residents that have a Form I-551, I-151 or I-551C, better known as a green card
· Those who carry an Arrival-Departure Record (I-94) from U.S. Citizen and Immigration Services that place them in one of the following categories: Refugee, Asylum Granted, Cuban-Haitian Entrant, Conditional Entrant (if issued before April 1, 1980), Parolee (in certain cases)
· Students who hold, or whose parent holds, T nonimmigrant status for victims of human trafficking
· Individuals determined to be a “battered immigrant-qualified alien,” as defined by the government, and their children
· Citizens of the Federated States of Micronesia, the Republic of the Marshall Islands or the Republic of Palau
Confirm with your college’s financial aid office whether you fall into any of these categories, and if so, submit a Free Application for Federal Student Aid (FAFSA) in order to access federal financial aid. If you can qualify for federal direct subsidized or unsubsidized student loans, their interest rates are lower and they come with a wider range of repayment protections than private loans provide. Recipients of the Deferred Action for Childhood Arrivals (DACA) program can’t get federal student aid, but they may be able to get college aid from their schools or states.
Frequently Asked Questions
1. Who qualifies as an international student?
International college students are generally those who take classes in the U.S. for a limited period of time and who arrive on specific visas, such as the F-1 student visa.
You are not considered an international student if you have a green card, or if you’re a U.S. citizen but your parents have a different citizenship status than you. When you apply for federal student aid, in fact, the FAFSA does not require you to enter information about your parents’ citizenship status.
2. How is my international student loan interest rate determined?
Lenders that make loans to international students and require them to have a U.S. citizen co-signer generally look at the same information that any private student lender would: the co-signer’s credit score, income, debt-to-income ratio and history of making on-time debt payments.
When deciding who would best serve as a co-signer on your loan, consider that person’s financial history and whether his or her income and credit would qualify you for the lowest possible interest rate. Make sure the co-signer knows that he or she will take on payment responsibility if the student cannot.
3. If I am eligible for federal student loans as a non-citizen, should I apply for federal or private loans?
For most eligible borrowers, federal student loans are the better option. That’s because they come with income-driven repayment plans and student loan forgiveness programs based on the type of career and repayment plan you choose. Their interest rates also are often lower than private loan rates.
But federal loans have maximum amounts you may borrow up to, so you might find that you need more money than the federal government will provide. In that case, it’s possible to compare private student loan options to make up a shortfall. But ensure you have maxed out all possible grants and scholarships before considering student loans.