Managing Student Loans

Studying at an international school is an exciting prospect, which you may be considering for some part of your college education. Excellent opportunities are available to those who have a good international school on their resume. You could even be planning to study at an international school for your total college education, and be worrying about how to finance it.

US students are able to study in international colleges with almost the same funding as students studying at home. Although the actual funds needed may be slighter higher due to the travel costs involved, those planning to study at an international school have access to the same federal funding as those in the US.

Federal funding is available in the form of Stafford loans, both subsidized and unsubsidized, depending on means testing.  A Stafford loan is the best and most cost efficient way of borrowing open to students and should be the first option you explore after any available scholarships and grants. The international school you choose must be recognized and accredited by the US education department for you to qualify for a federal Stafford loan, but then all usual criteria of the loan apply. Be sure to submit your FAFSA application forms in good time.

The other federal loan available to the college student attending an international school is the federal PLUS loan which parents may avail themselves of on behalf of their child. Provided the student is under 24 and the parent passes a credit check then a fixed rate PLUS loan, which is not needs based, can be taken. Typically a new PLUS loan will be taken each college year and they may be consolidated. This is an option if the student’s parents are willing to take on this loan. It should be noted that the parent will remain the responsible borrower on a PLUS loan and it cannot be transferred into the student’s name at any point.

The final loan source is a private one, and again the same conditions apply to the student studying at an international school as one studying in the US. Some lenders do insist though that  a US citizen must co-sign and endorse such a loan. Generally this does apply to private student loans, but not if the student has their own credit history established.  An additional fee is usually applied to a private student loan if it is arranged for international study. The international education financial aid (IEFA) is also available to give further advice to students looking at international colleges.

The best advice though for those planning on taking a student loan to study abroad is to maximise as much borrowing as you can from the federal loan system before looking for any additional funding.  Don’t let the thought of a fancy foreign lifestyle tempt you to borrow more than you need. Remember it all has to be paid back.