Friday, June 3, 2011

U.S. Student Loans

“The human species, according to the best theory I can form of it, is composed of two distinct races, the men who borrow, and the men who lend…”
- Charles Lamb

…And in the case of a student in need of financial assistance, Federal Student Loan programs and Private Loan programs will alleviate his monetary dilemma by acting as the ‘lender’, handing money to the said ‘borrower’ in the form of student loans.

So, what are student loans?

In simplistic terms, student loans are loans given to students in need of financial assistance in their pursuit of higher education. With student loans being loans, they logically entail the borrower paying back the money that was lent to him.

In the United States, there are different kinds of student loans :

1. Federal Student loans (made to students directly) - With this kind of loan, the upside is that students don’t have to start paying until after their graduation. However, the downside to this is that amounts handed out to students are limited.

According to Wikipedia, “The first type are 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. They may be subsidized by the U.S. Government, or may be unsubsidized depending on the student’s financial need.”

(a) Subsidized loans are given to students with apparent financial need, i.e., students who come from low income families. Stemming from the term ’subsidized,’ the federal government pays for the interest of the student’s loans while still he is still in college.

(b) Unsubsidized loans are of course, the opposite of subsidized loans. The government will not pay for the interest of the student’s loans. This means that the student will pay for the money he borrows plus the accrued interest of that debt.

2. Federal Student Loans (made to parents) - These loans are usually termed as PLUS loans or Parent Loans for Ungraduate Students. Being loans given to the students’ parents, these debts are the parents’ debts and not the students’. Therefore, if parents are unable to pay back the loans, “their credit will suffer.”

The amounts handed out are much higher than that of loans given to students, in order for parents “to cover any gap in the cost of education.” However, unlike Federal Student loans given to students directly, PLUS loans do not have a ‘grace period‘ - meaning, payments for the said loans should be made during the student’s stay in college and not only after graduation.

3. Private Loans - According to Wikipedia, “These are loans made to students by private finance companies: sometimes banks, sometimes specialized education lenders. Advocates of private student loans suggest that they combine the best elements of the different government loans into one: 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.”

Although Shakespeare was a great believer that neither a borrower or lender be, I have to disagree with him in the case of taking out student loans. Student loans alleviate financial burdens by delaying them for a later time when the student or his parents are better equipped to pay for higher education.

The question, however, is : Are student loans available for international students as well — since when it comes down to it, paying for a U.S. education (and at the same time, financing one’s everyday living when one gets to the States) might be more difficult for a foreign student to do than a local one?

In all honesty, international students will have more difficulty in their attempts to apply for student loans. This is, of course, expected since one is not a resident of the country.

But, as I’ve reiterated before, difficult does not equal impossible.

International students can apply for student loans and I’ve found several loopholes, sites and resources that can aid them to do so :

(* sources : eduPass; International Student Loan Center; eStudentLoan International Students Loan Page; International

1. U.S. banks will lend an international student who knows a creditworthy US citizen or permanent resident (holder of a “green card”) who will willingly co-sign his student loan application.

2. GATE (Guaranteed Access To Education) Student Loan Program - “is a nonprofit private student loan program offered through participating schools in conjunction with Bank of America, Bank of Boston, and the National Collegiate Trust (NCT). Undergraduate international students can borrow under this program with a creditworthy US citizen or permanent resident as cosigner”

3. Global Student Loan Corporation (GSLC) - GSLC offers student loans for international students that do not require a US citizen or permanent resident to co-sign the loan. (A co-signer in the student’s home country may be required. Often this co-signer is the student’s parent or guardian.) GSLC works with financial institutions and banks located in the student’s home country to provide financing for the student’s education.

4. International Student Loan Program (ISLP) and Study Abroad Loan Progam (SALP) - ISLP is an alternative loan program for international students to study at approved US colleges and universities.

5. Massachusetts Educational Financing Authority (MEFA) - The Massachusetts Educational Financing Authority offers the MEFA Loan program for foreign students attending one of more than 80 participating colleges and universities in Massachusetts.

6. Norwest Bank (1-703-749-0131 or the financial aid department at 1-800-366-6227). These MBA loans are for graduate business and medical students who are international students.

7. The Education Resources Institute (TERI) (1-800-255-8374 x210 or 1-617-426-0681). The TERI Professional Education Plan (PEP) loan is available for graduate and professional study. International students can borrow the cost of education up $20,000 per year (cumulative limit of $80,000) with a creditworthy US citizen as cosigner.

8. International Student Loan Center - “ is a service of The Student Loan Network and International Student Network, a multi-national education services company offering students options for managing the entire education lifecycle, from getting into their college of choice to financing their education and beyond.”

9. eStudentLoan International Students Loan Page - a loan finder

10. International - “If you are an international student (non-US Citizen) then we have a loan program that will suit you. It is available to all citizens who are planning to study at schools in the USA at approved schools.”


Graduating in 2004 from Ateneo de Manila with a major in AB Communication and a minor in AB History, Nikki Alfonso lives for the written word. She had her first taste of being a salaried writer in January 2004 when she began writing for Eversun Software Corporation. Prompted by the need to find a job after graduation, her love of putting pen to paper and entertainment, she decided to take on a full-time job in television as a creative staff member and writer wherein she would be paid for daydreaming and telling stories. Wanting to give back to a cause close to her heart, she also writes for JADE -- an online magazine seeking to showcase English-speaking Asian women as intelligent and well-accomplished movers and shakers in their respective fields.

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