Education in abroad is a dream that makes thousands of young people to hope, to pack and embark to an altogether different context in order to continue their education. However, as with any journey on this scale, there is one rather appellate thing lurking in the sidelines – the money. While domestic students can combine scholarships, government aid and relatively open loan systems, the foreigners often look at limited and sometimes overwhelming options.
Education is not cheap at all especially when you are studying in the United States, United Kingdom or Australia. Interestingly, while scholarships have been a traditional way of financing students’ education, they do not meet the total costs of tuition, accommodation and personal sustaining expenses especially among international students. This is where student loans come into picture. However, getting a loan does not involve a single distinct linear process but rather a process full of turns — turns of events, the good and the bad.
A Global Dilemma: They all point to the fact that the cost of international education is very high.
The first challenge that students encounter when participating in international education is always cost. The fact is that whereas in some countries the education is partially or fully paid by the state, the universities of the major academic countries demand much higher tuition fees. For instance, several years of education in a renowned university in the United States could reach $50, 000 for tuition fee to be paid annually. Tack food, shelter, books, insurance, travelling and many more on it and you get a humongous figure.
Now, one might wonder: that is, how do international students finance these costs? A large population of the students is from privileged families whose financial needs are catered for by theirParents. But that story is not true of all people, middle-income origin overseas students are faced with the increasing difficulty of seeking financial assistance. For these students loans become a necessity.
But here’s the rub – while many domestic students can borrow through government funded low-cost loans, international students can’t. They must look for other opportunities that can be deemed successful.
Problem of Restricted Access to Government Credit
Many governments guaranteed student loans are intended for citizens and or permanent residents. For example, in the United States, the federal student loans, recognized for providing loans that attract small interest rates and convenient term of repayment are only available to the permanent residents of U.S or those persons who meet the following conditions: This means that it is very difficult for most international students to be allowed into the country. The same is true to some extent in countries such as Canada, the United Kingdom and Australia in which government funded loans are generally not accessible to international students.
However, there are some exceptions and they include but not limited to: There are a few instances that will make international students qualify for loans depending on their visa status or their ability to stay in the country for an extended period of time. But such cases are an exception, and they depend on the general laws of immigration of a given country. Thus, the majority of international students has to look for private loans and institutional funding to address such a gap.
Private Loans: An Oasis or a Mirage?
So private loans can be useful for financing an education for international students albeit with some conditions. The most obvious obstacle is such conditions like a co-signed card. Private lenders for instance the banks and credit unions usually provide loans to international students providing that they an American equivalent co-signer who has a decent credit score. In other words, all lenders prefer less risk, and without a financial guaranty to cover defaults in the country, chances of getting a loan decrease.
To such students, this requirement feels like end of the road if they do not have a co-signer based in the United States of America. They are left with other options looking for more specific lenders who recognize the needs of the international students.
Fortunately, a few organizations have realized this problem and provide international student loans without co-signer. The current players in this market include Prodigy Finance, MPOWER Financing and Stilt. These lenders base their operation on the idea that these international students are a low risk to lend money to because of the future income, especially, those studying programs that are in high demand for example engineering, medicine and business.
Institutional Loans and Aid
A few universities realizing the financial responsibilities of international students already provide institutional loans. These loans which are usually organized by the university can have more relaxed conditions. However, their availability is conditional and they could be more expensive as compared to Federal loans. Furthermore, universities often provide a package of grants along with credit facilities where the grants are mostly for the needful students and rarely meet all the expenses.
Of course, it should be pointed out that institutional loans are not available at all institutions, and the rates differ greatly. Sometimes, students can look for a loan or seek a scholarship after he or she enters with the school of choice but such scholarships will be competitively sought after.
The Role of Scholarships and Grants: A Partial Solution
However, of the four major means of financing international education as identified in this article, scholarships and grants are other available mechanisms. A lot of educational establishments, some countries and states and various private companies provide international student scholarships. Indeed, scholarships may sometimes only be a partial cost of tuition but may even include living expenses especially for deserving students or students from certain regions of the world.
Nevertheless, getting a scholarship is not that easy as many would think. The competition is high
so – programs have stringent qualifying standards. The candidates can be required to prove academic excellence, leadership qualities, or full-fill demographic or nationality criteria, in many cases.
For those who manage to be awarded a scholarship though, the financial burden is somewhat lifted off their shoulders. But once again, as much as was also highlighted, these scholarships can occasionally, be partial scholarships; this keeps the importance of loans as a funding solution for international students vital.
The Shadow of Debt: Long-Term Considerations
Arguably, one of the biggest problem areas that are related to student loans, especially with reference to international students is the issue of looming debts. In contrast to their domestic counterparts who may have a relatively stable picture of the labour market that awaits them after graduation, international students have even more foggy expectations. These jurisdictional limitations can be dictated by laws governing issuance of visas to their home country, an oscillating job market and even political instabilities among others.
For instance, in the United States, most foreign students with F-1 visa stay and work through the OPT program. However, OPT is only short term and students who cannot get full time jobs or H-1B visa can land into the Most disadvantageous position in having to pay back loans while in their home countries earning less.
This fact alone makes it important that people who are taking out student loans should do so after careful consideration. Students need to compare the various options and assess the implications of the loan in regard to; the cost of the money, the mode of repaying, and some punitive actions. In the same respect, it is important that students also have a contingency plan when it comes to how they will pay their loans, whether utilizing income contingent repayment plans or finding employment in countries with better post graduate employment laws.
Conclusion: A Complex Web of Options
In conclusion, the student loan as an international student is not nearly an easy thing to do as presumed. Since they can rarely obtain government guaranteed loans, most students must operate in this private loan market or, more idealistically, depend on institutional funds. While co-signer requirements and high interest rates may present a setback, there are promising prospects such as that offered by Prodigy Finance and MPOWER Financing.
Lastly, thus, student loans make global education possible but demand thoughtful planning and future-oriented thinking. They have to analyze the advantages of getting an international degree against the costs that it entails and in doing so they are able to graduate not only with knowledge but ability to successfully fund themselves.