How do student loans and financial aid differ for Indian students?

Paying for a U.S. education can be expensive. This is why many domestic and international students seek financial help for their higher education costs.

This kind of help is called financial aid. As you plan on studying at a U.S. college or university, you might have also heard about student loans for international students.

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Key statistics

  1. The proportion of Indian students among all international students:Indian students now make up 29.4% of the total 1.1 million international students in the U.S. This means that nearly one in three international students in the U.S. is from India, further cementing their dominance in global student mobility.Source: IIE Open Doors 2024 Report
  2. Total number of Indian students in the U.S. (2023/2024):Indian students now form the largest international student group in the U.S., with a record-breaking 331,602 students in 2023/2024. This surge reflects a growing trend of Indian students seeking world-class education and better career opportunities in the U.S.Source: IIE Open Doors 2024 Report
  3. A sharp increase in Indian students studying abroadThe number of Indians studying abroad has surged by 52.2% in the last five years, increasing from 586,337 in 2019 to 892,989 in 2023. The United States remains the top destination, hosting 234,473 Indian students, followed closely by Canada (233,532 students, a 76% increase) and the United Kingdom (136,921 students). This trend reflects the growing global mobility of Indian students seeking quality education and career opportunities abroad.Source: Hindustan Times – Over 50% Increase in Indians Studying Abroad

Types of financial aid for Indian students

Financial aid can be broken down into a few options. Below are the main types of financial aid for Indian students.

  • Scholarships. Money that’s awarded that doesn’t have to be paid back. It might be offered to students who have financial need or who are awarded based on academic success.
  • Grants. Grants are another type of aid that typically don’t need to be repaid as long as you fulfil all of the requirements of the grant programme.
  • Student loans. Education loans must be paid back, typically plus interest and possibly added fees. Indian students usually can qualify for non-federal student loans, but requirements are different across lenders.
  • Work-study. Some schools might allow Indian students to participate in a work-study financial aid programme that uses non-federal funds. It requires you to work a job, sometimes on campus, while you’re enrolled in school. Although it only covers some of your school expenses, work-study funds can help.
  • Fellowships. Fellowships are usually offered to graduate students and are available as financial aid for Indian students. These awards provide financial assistance while helping students grow their professional and academic skills through training, research, or other activities.

Financial aid vs. student loans

Financial aid is any money-based assistance that’s meant for use toward college expenses. These expenses might include tuition and fees for your degree programme, housing, books, and supplies.

There are different types of financial aid, and student loans are one kind of financial aid option available to Indian students. In other words, all student loans are considered financial aid, but not all financial aid are student loans.

Where to find financial aid

India might have financial aid awards for its citizens that can help you obtain your education abroad. A good place to start your search before departing is through your government, or with India’s embassy or consulate office after arriving in the U.S.

You can also find financial aid for Indian students in the U.S. Some schools offer special aid programmes for international students, like institutional student loans, fellowships or scholarships. Ask your school’s financial aid office about the financial aid you might be eligible for.

Nonprofit organisations in the U.S. also offer financial aid for Indian students. For example, the Institute of International Education offers a database of grants, scholarships and fellowship awards. Another source of financial aid is the International Education Financial Aid database at IEFA.org, where you can find additional financial aid options that are specifically designed for students who want to study abroad.

Education loan for Indian students

When it comes to student loans for international students, you’ll find them through private loan lenders. Private international education loans might be available through your school or through a private bank or lender. Read MPOWER Financing’s comprehensive guide on how international student loans work for everything you need to know.

What to look for

  • Eligibility criteria. Review the lender’s visa, school, and programme requirements, as well as other criteria to qualify.
  • Annual percentage rate (APR). Compare the APR of each international student loan you explore. The lower your APR, the less you’ll pay toward your education debt.
  • Fees. Watch out for education loans that have high fees, like an application or disbursement fee. These fees add to your total cost of borrowing for your degree.
  • Borrowing limits. Student loans have different minimum and maximum borrowing limits. Check whether the education loan meets your funding needs.
  • Cosigner requirement. If you’re applying for a loan that requires a cosigner, make sure you meet the lender’s requirements. For example, a lender might require that you find a cosigner who’s a U.S. citizen or permanent resident.

Getting financial aid as an Indian student

Depending on your school or the financial aid programme, you might need to submit certain forms to apply for international financial aid.

Submit an International Student Financial Aid Application

The International Student Financial Aid Application (ISFAA) is a paper application. It’s meant for international students who want to apply for financial aid and are studying in the U.S.

The ISFAA asks for the student’s and their parents’ information and financial details like household income, assets and expenses. You must also include existing financial aid you’ve received from other sources. If you have a special financial circumstance, you can explain it on the form. After filling out the application, submit it to the college or university that requested it.

Complete a College Scholarships Service profile

Hundreds of U.S. schools and third-party scholarship organisations use the College Scholarship Service (CSS) profile as a requirement for international students.

The CSS is provided by the College Board. It’s an online application for nonfederal financial aid, like institutional scholarships and loans. You can find a list of schools that use the CSS in their financial aid process online. International students can fill out the CSS for a US$25 (INR 2,080) fee. If you need additional CSS Profile reports, the cost is US$16 (INR 1,330) each.

Even if Indian students are not eligible for federal financial aid, filling out the FAFSA might be helpful. Some non-federal aid programmes require all applicants, including international students, to complete a FAFSA as part of the application process. Taking all of the steps needed to meet eligibility criteria can help you find more sources of financial aid for international students.

The bottom line

Financial aid is a broad term to describe money from a third-party source that’s provided to a student for their education. Even if you don’t qualify for U.S. federal financial aid as an Indian student, there are options to help pay for your education.

Financial aid for Indian students includes scholarships, grants and education loans. These can be found through nonfederal sources, like your school, home country or independent organisations that offer scholarships and grants to international students.

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FAQs


What specific financial aid opportunities are available exclusively for Indian students studying in the U.S.?

Indian students have access to several country-specific funding options, including the Fulbright-Nehru Master’s Fellowships, which provide up to US$38,000 (INR 31,66,000) annually for select disciplines. The Inlaks Shivdasani Foundation offers scholarships up to US$100,000 (INR 83,33,000) specifically for Indian graduates attending top U.S. universities. The JN Tata Endowment provides loan scholarships of approximately INR 10,00,000 with partial loan conversion to grants based on academic performance. Additionally, discipline-specific opportunities exist, such as the Dr. Reddy’s Foundation scholarships for pharmaceutical studies and Jindal Fellowships for public policy students. Also, MPOWER Financing awards up to US$5000 to promising STEM postgraduate students from India through its Udaan India Scholarship. Many premier Indian corporations, including Reliance, Tata and Mahindra, offer employee children education assistance programs that can be used for U.S. education, typically covering 60-75% of tuition costs for qualified applicants.

How do Indian bank education loans differ from U.S.-based loans for studying abroad?

Indian bank education loans typically offer lower interest rates compared to U.S. private loans for international students but require substantial collateral such as property with a value exceeding INR 7,50,000. Indian loans offer significant tax benefits under Section 80E, allowing unlimited interest deduction for eight years. Indian banks generally disburse funds directly to parents in rupees, requiring currency conversion and international wire transfers, whereas U.S. lenders pay institutions directly in dollars. Repayment timelines differ significantly – Indian loans typically require repayment to begin within six months of graduation with five-to-seven-year terms, while many U.S. lenders designed for international students offer more flexible 10-15-year repayment periods and may allow interest-only payments during study periods. Additionally, many Indian banks require a local co-applicant (typically parents), while some U.S. lenders offer no-cosigner options based on academic potential.

What strategies can Indian students use to maximize institutional scholarships at U.S. universities?

Indian students can significantly increase their institutional scholarship chances by applying to universities where they would represent geographic diversity – schools with few Indian enrollees often offer higher scholarships to increase international representation. Target second-tier universities (ranked 50-100), which typically offer more generous funding to attract top international talent compared to Ivy League institutions. Engineering, computer science and mathematics students should highlight specific technical skills that align with departmental research priorities and mention willingness to work as research or teaching assistants. Apply during early action/decision rounds when more funding is available, and prepare a separate “scholarship resume” highlighting leadership roles, community service in India and unique cultural contributions. Consider applying to universities with established Indian alumni networks that fund dedicated scholarships – schools like Purdue in Illinois and Texas A&M have active Indian alumni associations offering significant financial support specifically for incoming Indian students.

How should Indian students approach the financial verification process required for both visa applications and university admission?

Indian students must carefully coordinate financial documentation to satisfy both university and visa requirements, as inconsistencies between these submissions are a common reason for visa rejections. Begin by obtaining an official bank statement showing liquid funds covering at least one full year of expenses (approximately US$60,000-US$80,000 or INR 50,00,000-66,60,000 depending on the institution) with funds having been in the account for at least six months. For educational loans, obtain a sanction letter specifying the approved amount rather than just a pre-approval. MPOWER Financing provides a free visa support letter. If using multiple funding sources, create a detailed funding chart showing exactly how each semester will be covered. Have all financial documents professionally translated if originally in a regional Indian language and notarized with an apostille if required. Many successful applicants prepare two versions of financial documentation – one showing just the minimum required for I-20 issuance to reduce estimated visa costs, and a more comprehensive package for the visa interview demonstrating multiple security funds. Additionally, be prepared to explain family income sources, especially if family businesses are involved, with supporting documentation like income tax returns for the past three years.

What merit-based funding opportunities are available specifically for Indian graduate students with significant work experience?

Indian graduate students with substantial professional experience have access to several specialized funding sources, including the prestigious Tata Scholarship for Cornell University, which provides full funding for select Indian graduate students with at least three years of professional experience. The Aga Khan Foundation offers scholarships of up to US$25,000 (INR 20,83,000) annually, giving preference to mid-career professionals returning to academia. Many U.S. business schools, including Kellogg, Wharton and Chicago Booth, have India-specific scholarships ranging from US$10,000-US$50,000 (INR 8,33,000-41,65,000) targeting professionals with five plus years of experience, particularly those from underrepresented sectors like health care, public service and sustainable development. For executive and professional master’s programs, the Ratan Tata Fellowship provides significant funding specifically for Indian public service professionals. Additionally, many Indian corporations, including Infosys, TCS and Wipro, offer employer-sponsored education programs for employees pursuing graduate education abroad, typically requiring a commitment to return to the company for two to three years after graduation. Professional organizations like the National Association of Software and Service Companies (NASSCOM) also provide industry-specific scholarships for experienced technology professionals pursuing advanced degrees in emerging fields like artificial intelligence, cybersecurity and data science.

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