International students appearing for student F-1 visa interview will usually have higher education loans approved from a bank.
In India, students commonly get loans from banks like SBI, ICICI, HDFC, Canara Bank, and so on. Student loan APRs are much higher compared to student loans in the U.S.
In order to attract more international students, U.S. business schools during the last few months had began the process of creating student loan programs for international students without the need for a co-signer.
Usually, to obtain student loans in the U.S., there should be a co-signer. However, for international students, it’s usually difficult to get a co-signer for a loan unless the student has relatives in the U.S. who can co-sign for the loan.
If the student’ doesn’t pay the loan, then the bank will come after the co-signer so that the loan amount can be paid back.
However, this “no co-signer student loan type for international students” in the U.S. is only available for certain MBA programs.
No Co-signer Student loan for International Students in the USA
Recently, the following business schools have introduced the No co-signer student loan for international students:
- University of Chicago
- Harvard University
- Pennsylvania’s Wharton School
- Yale School of Management
According to Graduate Management Admission Council (GMAC), about 40 business schools in the United States and Europe will make the “no co-signer student loan” available beginning with the 2009-10 academic year.
Interest Rates – Student Loans
Interest rates for student loans vary among countries. However, it should be noted that applying for student loans in the US seems to be a much better option than applying for loans in India.
- Student Loan Interest Rates: India – 12% and above
- Student Loan APR: USA – 5%+
There is a huge difference between interest rates, so doing it right could save students a lot of money.
Due to the on-going economic recession, there will likely be a decrease in the number of international students planning to attend U.S. universities, even though more students had applied for admission.
Another major reason why students are hesitant is due to the difficulty on getting an H-1B visa due to the strict H-1B visa rules and regulations being implemented by the USCIS.
If students get loans to study in the U.S., but if they cannot find a job or funding assistance/scholarship, it will be hard to pay back the loan amount.
Universities in the U.S. offering engineering and science programs should start offering student loans without co-signer for international students.
This strategy will definitely attract many students everywhere. However, will universities come forward?