Student loan programs for Indian students

For Indian students, student loan programs offer a practical solution to cover expenses, but navigating the various options can be challenging. This article breaks down key loan programs for Indian students, student loan refinancing, and other financial aid opportunities, helping you make informed decisions about financing your studies.

1. 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
2. Year-over-year growth – Indian students in the U.S. (2022/2023 to 2023/2024):The number of Indian students in the U.S. increased by 23% in just one year, highlighting the strong demand for American education. This is the highest annual growth rate in over a decade, showing a clear shift in global mobility trends.Source: IIE Open Doors 2024 Report
3. Median living expenses in popular student cities:According to The Times of India, certain U.S. cities offer affordable education and living costs for Indian students. San Diego, California, has an average annual tuition of INR 12,23,740, with living expenses ranging from INR 1.2 lakh to INR 2 lakh per month. Baltimore, Maryland, is another budget-friendly option, with tuition costs averaging INR 17,00,543 per year and living expenses between INR 85,000 and INR 1.5 lakh per month.Source: The Times of India – 5 US Cities Where Indian Students Can Study Without Breaking the Bank

Indian students typically don’t qualify for government loans, such as U.S. federal student aid, so private loans and loans from India are the most common options. The two primary student loan types available to Indian students are:

1. Private international student loans

Private student loans are issued by banks, credit unions and specialised lenders. These loans often come with strict eligibility requirements, including a cosigner, typically a U.S. or Canadian citizen or permanent resident. If you can find a cosigner, private loans can offer favourable terms, but without one, your options might be more limited.

Some education loan providers also issue no-cosigner student loans, evaluating your academic performance and potential future income rather than requiring a credit history or guarantor. These are becoming increasingly popular among Indian students, especially in fields like STEM or business, where earning potential is higher.

2. Loans from India

There are several student loan programs available specifically for Indian students studying abroad. Many major Indian banks and financial institutions offer education loans for overseas education. These loans can offer better interest rates or repayment terms but may come with currency exchange risks affecting the overall cost of the loan. Some Indian lenders may require collateral for larger loan amounts.

While student loan programs are an essential part of many Indian students’ funding strategies, it’s important to explore other financial aid options to reduce the amount you need to borrow.

1. Scholarships and grants

Unlike loans, merit-based scholarships and grants don’t need to be repaid, though you may need to meet and maintain certain criteria. Many universities and private organisations offer scholarships specifically for Indian students. The Indian government also has several scholarship programs for citizens studying abroad. Applying for these awards can significantly reduce your financial burden.

2. Assistantships and work-study programs

Many graduate students can supplement their income through assistantships or work-study programs, which allow you to work part time while studying. These positions are often tied to academic departments and can cover part of your tuition or provide a stipend for living expenses.

3. Employer sponsorship

For students already working or those with employment lined up postgraduation, some companies offer sponsorships or loan repayment assistance programs as part of their employment package. This is more common in STEM fields like engineering, technology and healthcare. Several multinational corporations with operations in India may sponsor promising employees for advanced education abroad.

MPOWER Financing offers student loan programs specifically for Indian students pursuing their education in the U.S. or Canada. Founded by international students, MPOWER understands the unique challenges faced by those studying abroad. That’s why MPOWER provides more than just flexible loan options. MPOWER also offers additional support services like career guidance, immigration assistance and financial services to help students succeed before, during and after graduation.

Here’s how MPOWER’s student loan programs stand out:

• Flexible loan options: MPOWER provides a wide range of fixed-rate student loans, from US$2,001 (INR 1,66,700) to US$100,000 (INR 83,33,000), designed to fit the varied needs of Indian students. A 0.25% interest rate discount is available for those who opt for automatic payments.
• No cosigner or collateral required: MPOWER’s loan programs do away with the need for cosigners or collateral, making it easier for students to secure funding. MPOWER believes in each student’s future potential and offers loans based on an applicant’s career prospects, among other criteria. Plus, timely payments help borrowers build their U.S. credit history — and there are no prepayment penalties.
• Fast, digital process: MPOWER’s student loan application process is fully online and accessible from anywhere in India. With quick approvals, seamless disbursement, and an eligibility check that takes just 30 seconds, MPOWER helps students focus on their studies, not paperwork.
• International scholarships and holistic support: MPOWER goes beyond loans, offering international scholarships and services that cater to the specific needs of graduate students. Whether through financial services, career resources or visa support, MPOWER ensures students have the tools they need to thrive.

Once you’ve completed your studies and begun repayment, refinancing your student loan could be a smart financial move. Refinancing allows you to replace your current loan with a new one — ideally with better terms, such as a lower interest rate or longer repayment period. However, not all Indian students are eligible for refinancing, so it’s crucial to understand when and where it makes sense.

When should you consider refinancing?

• You have a strong credit history: If you’ve built a solid credit history while studying in the U.S. or Canada, refinancing can help you secure a lower interest rate, reducing your monthly payments and total loan cost.
• Your income has increased: Refinancing may make sense if you’ve secured a job with a steady income postgraduation. Lenders may offer more favourable terms based on your current financial situation compared to when you were a student.
• Your current loan has a high interest rate: If your current loan has a high variable or fixed interest rate, refinancing could help lower it. Even a small decrease in your interest rate can reduce the amount you pay in interest by thousands over the life of the loan.

Where to refinance your loan

Many private lenders offer refinancing options for Indian graduates, but it’s essential to compare lenders and terms before making a decision. Some lenders specialise in refinancing loans for international graduates, often requiring proof of income and a strong credit history in the U.S. or Canada.