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Student Education Loan

By: EconomyWatch Content Date: 1 December 2009

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A student education loan is an important financial aid, particularly when students are keen to study abroad. The growing trend of overseas education is evident from the fact that about 262,000 students studied outside the US in 2007-08. This is based on the report titled, ‘Open Doors 2009: U.S. Students Studying Abroad.’ Due to the wide-range of expenses pertaining to overseas education, a student education loan has become an essential aid for even students who have sound financial backgrounds.

Student Education Loan for Studies Abroad: Federal Financial Aid

According to the Higher Education Act of 1965, students in the US are eligible for financial aid to study abroad if they are registered in a program which is approved by a home institution.

Financial aid for overseas education covers several expenses pertinent to studying and residing abroad, including:

· Tuition and other fees

· Accommodation expenses

· Visa and passport charges

· Round-trip transportation costs

· Health insurance

Completing the Federal Application for Student Aid (FAFSA) form is the first step for acquiring a government financial aid to study abroad. These financial aids are governed by the United States Department of Education (DoE).

They include:

· Perkins Loan,

· Stafford Loan,

· Pell Grant and

· PLUS Loan for parents.

Students who qualify for federal aid must appear for entrance and exit counseling. They need to be informed about the loan’s terms and conditions.

Private Student Education Loan for Studies Abroad

Though an excellent financing alternative, the government backed student education loans are limited in number and led to growing acceptance of private education loans. A private student loan is a good alternative for funding overseas education if a student:

· does not qualify for government-backed financial aid

· is not enrolled in a US college or university

· is unable to meet all the expenses pertinent to studying abroad, including tuition, accommodation and/or transportation.

Despite the rigid terms and higher interest rates, such loans are a good resource for funding higher education abroad as they accompany:

· Higher loan limits.

· Payment holidays or grace period until graduation.

· Multiple repayment options.

· Student education loan consolidation option.

A private student education loan is typically offered on the basis of a student’s credit history. Those who come from weak financial backgrounds may require a co-signer to help them obtain a private student education loan to study abroad.