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Tuition fees for study in the US can be expensive, so many international students choose to fund their studies with a bank loan. While it can be tempting to take out as big a loan as possible, you need to remember that all that money will need to be paid back – with interest.
There are two types of loan open to international students wanting to study in the United States:
Student loans are bank loans designed purely for the purpose of studying. The terms of a student loan vary from country to country, but most student loans allow you to defer interest payments until you have graduated or even until you are in a job. The application criteria will normally involve you listing all your projected costs, and the loan will cover tuition fees and a portion of your living costs.
Personal loans are similar to bank loans in that you can use the money for whatever you feel like. However, the interest fees and terms of repayment will often be higher than that of a student loan. Payments on a personal loan cannot be deferred, so expect to start paying money back whiles still studying.
There are very few US-based loans that are available for international students – but there are a couple of ways you could still benefit from a US bank loan.
American passport holders or dual citizens can apply for a US federal loan through the FAFSA website, which offers some of the lowest interest rates around and have deferred interest payments.
International students can also apply for US bank loans if they know a creditworthy US citizen who is happy to co-sign the loan terms with them. These students should contact their university’s financial department to find out about local banks who offer student loans.
USA Funds Dropping Student Loan Affiliates
INDIANAPOLIS – Indianapolis-based nonprofit USA Funds is ending its role as a student loan guarantor. The organization is transferring ownership of its two affiliates to Wisconsin-based Great Lakes Higher Education Corp., beginning January 1.
USA Funds says United Student Aid Funds, which is the largest student loan guarantor in the country, and Northwest Education Loan Association will continue to operate as normal under the new ownership.
The move allows USA Funds to “focus on advancing its nonprofit mission of enhancing preparation for, access to, and success in higher education,” the organization said in a news release. Great Lakes will provide annual grants to USA Funds to promote its student success initiatives.
“We are proud of our service as a student loan guarantor during the past half century, supporting $250 billion in financing to help more than 22 million students and parents pay for a college education,” said Bill Hansen, chief executive officer of USA Funds. “But the dramatic changes sweeping the higher education landscape and the emerging needs of our nation’s workforce and economy compel us to direct our full attention to helping more students succeed in postsecondary education and launch into rewarding careers and fulfilling lives.”
The ownership transfer comes as the Federal Family Education Loan Program winds down following legislation in 2010 that ended new loans under the program.
usa gov student loans
repay a Student Loan
Whether you’re still in school or you’ve already graduated, it’s important to start planning how you’ll repay your loan. To ensure your payments are manageable, find out about selecting repayment plans. Or, learn how to contact your loan originator to address any questions you may have.
If you can’t pay the full amount due on time or have to miss a student loan payment, your loan may be considered delinquent and you may be charged late fees. Contact your loan servicer immediately for help, and ask them about your options.
Eligibility for Loan Forgiveness, Cancellation, and Discharge
The US funds student loans are a great way to get financial assistance for your education, but there are some risks involved. However, with the right precautions you can avoid these risks and reap the benefits of this loan program.
The US funds student loans provide a great way for students to get the funding they need for school without having to worry about getting their credit score damaged. This is because they do not require any credit checks or co-signers to apply. They also have fixed interest rates so you will know exactly how much you need to pay back after graduation.
However, these loans have some drawbacks as well. For example, if you defer your loan payments by extending them into future years then you will pay more money overall because of interest charges incurred during that time period; so make sure that you only defer if you really need extra time making payments on your current balance amount or else it may cost more than it’s worth in terms of interest charges paid over time! Also keep in mind that if you default on your Direct Federal Loans then all federal protections like deferment options etc… will no longer apply once they’re officially considered delinquent accounts!