The Student Loan

By: EconomyWatch Content   Date: 15 December 2009

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The student loan is particularly relevant now due to the rising costs of higher education.  Pursuing studies in foreign countries is a popular trend with students all around the world, particularly the US students. The Institute of International Education estimates that over 220,000 US students applied for studying abroad in the year 2007 alone. Financing an education abroad, whether it is for the entire course or just a semester, is an intricate task. Though one can qualify for a scholarship or grant, these are seldom sufficient for covering the entire education amount.

An international student loan can hardly cover all expenses pertaining to the course or the education program.

The Student Loan: Consideration for Studies Abroad

Financing the rising costs of higher education is difficult for students with a tight budget, particularly when studying abroad in the midst of the declining dollar. Some financially feasible strategies to minimize the dependence on a student loan for studies abroad are:

  • Consider programs or courses in Asia, Africa or South America, where the currency exchange rates are comparatively more favorable than rates in Europe and Australia.
  • Favorable exchange rates enable students to stretch the dollar further, and thus cover more expenses.
  • Opt for a short-term, semester-based program, rather than a year-long course.
  • Ensure that the study-abroad program is acknowledged for transfer credit. Transferring credit from school helps to lower the graduation requirements and reduce the duration of studies abroad. Consequently, the student loan requirements are also reduced.

It is crucial to confirm that the chosen study-abroad program is eligible to secure federal financial aid as they accompany lower interest rates. Remember, most students are eligible to utilize federal aid, including Stafford and PLUS loans, to pursue their studies abroad. The Higher Education Act (HEA) states that a student can utilize federal aid to study abroad only when a/he is enrolled in a study-program recognized by the home college or university.

The Student Loan: Federal Aid Documentation for Study-Abroad

Students, who want to study abroad, must complete the following common financial aid forms:

FAFSA: This standardized federal aid form must be compulsorily furnished by a student to qualify for a federal student loan. The FAFSA is issued by the federal government each year on January 1.

CSS/Financial Aid PROFILE: This application is generally required by private universities and colleges. The PROFILE seeks to acquire more in-depth information about the student, including a statement of his/her parent’s income and expenses.

Some universities also require completion of their specific application forms. A student can find more information about individual-institutional aid application by contacting the office for financial aid pertaining to the selected home university.


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