Getting Financial Aid
So, you want to study in a foreign country, huh? Were you told that it isn't financially feasible? That it costs too much and that there are too many expenses and that you'd be better off staying in America?
Well, you were told wrong.
It is a myth that it will cost more money for a student to study in another country than to study in America. In fact, due to the current US higher education system, it could actually be cheaper to study somewhere else. Not only do foreign schools often charge less tuition (sometimes significantly less), but there are typically less restrictions like having to use the school's housing or meal plan, as well. Plus, the same financial options that exist for study in America exist for study overseas. What are those options? Read on.
Student Loans
Student loans are loans offered to students to assist in payment of the costs of professional education. These loans usually carry lower interests than other loans, and are usually issued by the government - wikipedia.org.
This definition may be simplistic, but it is accurate. Very few students can pay for their college education with the money in their bank account. Therefore, most students have to take out student loans that they will then pay back. This page will give you the ins and outs of student loans.
According to the Department of Education, students spent $24 billion in student loans in 1994-1995, and $33.7 billion in 1999-2000. One can only imagine how much money is borrowed now. Unless you have a trust fund or are lucky enough to have someone else pay for your education, you are most likely going to have to take out a loan. The question is, what type of loan? FinAid.org says it succinctly, "Education loans come in three major categories: student loans (e.g., Stafford and Perkins loans), parent loans (e.g., PLUS loans) and private student loans (also called alternative student loans). A fourth type of education loan, the consolidation loan, allows the borrower to lump all of their loans into one loan for simplified payment."
What does this mean? Well, let's start from the beginning. There are three major types:
- Loans made directly to the student - "These loans are available to college and university students and are used to supplement personal and family resources, scholarships, grants, and work-study," (www.wikipedia.org).
- Subsidized Federal - The federal government makes interest payments while a student with a demonstrated financial need is in college. Wikipedia easy explanation: those who borrow $10,000 during college will owe $10,000 upon graduation.
- Unsubsidized Federal - The interest accrues while the student is in college. Wikipedia explanation: the accrued interest will be "capitalized" into the loan amount, and the borrower will begin making payments on the accumulated total. For example, those who have borrowed $10,000 and had $2,000 accrue in interest will owe $12,000. Interest will begin accruing on the $12,000. Students can also choose to pay the interest while still in college.
- Parent Loans for Undergraduate Students (PLUS) - This is not a co-sign with equal accountability between parent and student. Instead, parents take out the loan and are responsible for the repayment. Adults are typically able to borrow more than students, based on credit history and income, so interest doesn't become as much of a problem. What is a problem, however, is that payments start immediately.
- Wikipedia advice: parents should consider "year 4" payments, rather than "year 1" payments. What sounds like a "manageable" debt load of $200 a month in freshman year can mushroom to a much more daunting $800 a month by the time 4 years have been paid for through borrowing. The combination of immediate repayment and the ability to borrow substantial sums can be dangerous.
- Private student loans - Private finance companies or banks give the loan as opposed to the government. Wikipedia gushes: they generally offer higher loan limits than direct-to-student federal loans, ensuring the student is not left with a budget gap. But unlike to-the-parent government loans, they generally offer a grace period with no payments due until after graduation. This grace period ranges as high as 12 months after graduation, though most private lenders offer 6 months.
According to the American Education Services, "the limit on what you are eligible to borrow depends on whether you are an independent or dependent student, what grade level you are considered to be in, and the amounts of other financial aid you are receiving. If you need additional funding beyond Federal and State loans and grants, you may consider a private alternative." To apply for a federal loan, fill out the Free Application for Federal Student Aid (FAFSA) - you can do so online at www.fafsa.ed.gov. Of course, the problem in your particular situation is that you won't be studying in America.
Fortunately, this isn't nearly as big of a problem as you may think.
Foreign Loans
Stafford Loans (They have a great page on how to get started at www.staffordloan.com) are probably the best known type of loan, and, as fate would have it, are offered to American students going to school in other countries. You can apply for this loan with InternationalStudentLoan.com at www.internationalstudentloan.com. If a Stafford Loan doesn't work for you (and the only way to tell is to look into it or apply) then check out some other options at www.internationalstudentloan.com.
Otherwise, ever hear of Sallie Mae? Of course you have, it's the number one student loan company in the country. Well, they offer student loans for international study, as well, so you and your best friend can get the same type of loan, even if he or she is going to Penn State while you're studying in France. Find all the information you need at www.salliemae.com.
International Banks
If you don't want to get a loan through the government or an organization, you can always get one through an international bank. Contact someone in your program for information on banks that offer this to Americans.
International Scholarships
Of course, you can also apply for an international student scholarship. Didn't know those existed? They sure do. Other countries want US students to come to their schools, so they will try to help you as best they can. For a great page on possible scholarships, go to www.iefa.org. This lists thousands of scholarships (as well as fellowships) and tells you for what part of the world they are, as well as what type of student is eligible, plus the important stuff like how much it is worth and how you can apply.
Country Dependant
The most important thing to consider, however, is that every country is different, and so every country's financial aid situation is different. For instance, Wikipedia.org describes how a few counties work:
- "In Australia, students can pay for university courses using the Higher Education Contribution Scheme (HECS). The selection criterion for HECS is based on the rank achieved in the secondary school final examination. HECS fees are government-subsidized, and are substantially cheaper than full-fee paying places which have lower entry requirements."
- Students in Canada are "normally eligible for loans provided by the federal government, in addition to loans provided by their province of residence. The loans are normally interest-free until one graduates, and are sometimes supplemented with grants, depending on need."
- "Although third-level tuition has been free in the Republic of Ireland since 1997, for other student expenses most of the major banks offer interest-free or cut-rate loans to students. There has been discussion on re-introducing fees, as recommended by the OECD, with deferred payment similar to the Australian system; i.e. a loan from the government repaid after graduation. The suggestion has however, been quite unpopular."
- In India, "Loans for education are mostly available from nationalized banks."
- "The New Zealand state provided student loans and allowances are available to tertiary students who satisfy the funding criteria. Full-time students can claim loans for both fees and living costs while part-time students can only claim training institution fees. A non-refundable means-tested student allowance for living expenses can be claimed by students who are over 25 years old or whose parents have a low income.
- Loans are repaid by a 10% tax surcharge on income, once the student graduates and is in employment. There is a minimum income level, roughly equivalent to the unemployment welfare benefit payment rate, that is exempt from assessment and an interest rebate that can be claimed for low income and while the student is studying full-time."
- "Study support and student loans in Sweden is administered by the Swedish National Board of Student Aid (www.csn.se/), a Swedish government agency."
- "British undergraduate and PGCE students can apply for a loan through their local education authority (LEA) in England and Wales, the Student Awards Agency for Scotland (SAAS) or their local education and library board in Northern Ireland. The LEA, SAAS or education and library board then assesses the application and determines the amount that the student is eligible to borrow, as well as how much tuition fees, if any, the students' parents must pay."
An Alternative
For a different way to save money, The International Student Travel Confederation (ISTC) offers International Student Identity Cards (ISIC) that help students save money worldwide by providing thousands of discounts. You can check it out at www.istc.org.
As you can see, there are many options for studying overseas. While this page can't supply you with all the knowledge and all the possibilities available, it can let you know that options exist. The myth that it will cost more money for a student to study in another country is wrong. The same options that exist for study in America exist for study overseas. And just like those options, the student has to explore what is best for him or her. Will Sallie Mae be your guardian angel? Does a Stafford Loan work best for your needs? Do you need your parents to take out the loan? Can you get a nice scholarship?
Ultimately, what you do is up to you. Just know that the option to get financial aid for studying in another country is available. You just have to find it.
