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How to study abroad on a budget

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Studying abroad in the U.S. or Canada can open doors to incredible career opportunities and lifelong connections. However, the cost of studying abroad isn’t cheap. Between tuition, housing and everyday expenses, the cost can run up to US$70,000 per year or more, depending on the school and program you choose. Fortunately, there are several ways international graduate students can make it affordable, including international scholarships, grants and private student loans. This brief guide looks at the challenges you may face as you try to study abroad on a budget and the different types of student loans for studying abroad.

The cost of education in the U.S. and Canada

Studying in the U.S. or Canada as an international student can be expensive, especially since the total cost of postgraduate studies is typically higher for international students than domestic students. But that doesn’t mean you can’t study abroad on a budget – it just requires careful planning. Here are the key expenses you should plan for:

  • Tuition and fees: Tuition costs vary widely depending on the school and program. While tuition at a private university may be US$70,000 or higher, public universities in both countries are more affordable.
  • Housing: Many students live in dormitories or university housing. If you choose to live off campus, rental prices will depend on the city and neighborhood. Rent can be high in big cities like New York, Los Angeles or Toronto, while smaller towns often offer more affordable options. Splitting rent with roommates can be a great way to save money.
  • Meal plans and food: Many students living in university housing choose to participate in meal plans. These are convenient but can be pricey. Cooking at home can help reduce costs. Grocery prices vary by location, so it’s important to factor food expenses into your budget when deciding where to study.
  • Transportation: Getting around can come with added expenses. Many students rely on public transportation like buses or subways, which often offer student discounts. If you live far from campus, budgeting for daily commuting costs is essential. Also, you should factor in the cost of traveling to and from your home country.
  • Health insurance: Most universities require international students to have health insurance, which can be expensive. In Canada, some provinces offer international students public healthcare coverage for free or a fee, while others require private insurance. In the U.S., health insurance is not required by the U.S. government, but most universities require it for enrollment.
  • Personal expenses: Everyday costs like phone bills, clothing, entertainment and social activities add up quickly. Budgeting for these expenses in advance will help you avoid financial surprises.
  • Foreign exchange and bank fees: International students should consider foreign exchange fees when studying in the U.S. or Canada. These fees can add up over time and affect the overall cost of your education. When transferring money internationally, banks and money transfer services often charge fees for currency conversion and wire transfers. These charges can be significant if you’re transferring large sums for tuition or living expenses.
Group of international students in the U.S.

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Options for loans and financial aid

As an international graduate student, there are multiple options for private student loans and financial aid that may enable you to study abroad on a budget.

  • Scholarships: Many universities in the U.S. and Canada offer scholarships specifically for international students. These awards are often based on academic merit or specific talents and do not have to be repaid, though you may need to meet and maintain certain requirements.
  • Grants: Grants are typically need-based and, like scholarships, don’t need to be repaid. They can come from universities, private organizations or government programs, and they’re designed to assist students who demonstrate financial need.
  • Work-study programs: Some institutions offer work-study opportunities where international students can work on campus. This enables you to earn money to cover personal expenses while gaining valuable work experience.
  • Loans for study abroad: Since international students in the U.S. and Canada are not eligible for government loans, loans from private lenders are a good option. Private lenders are banks, credit unions and other businesses that specialize in lending to international students. There are two types of private overseas education loans:
  • Loans with a cosigner: These loans require a U.S. or Canadian resident to cosign your loan, which means the cosigner will be responsible for repaying it if you cannot. A cosigner is usually a relative or close family friend who lives in the country where you want to study.
  • No-cosigner student loans: Lenders base loan decisions on your academic history and your future career potential, rather than your current financial status or credit history.

As you plan to study abroad on a budget, you’ll likely need to combine funding from one or more of these sources.

All about no-cosigner student loans

When trying to study abroad on a budget, many international students find that no-cosigner loans are one of the best options. Scholarships and grants can help greatly if you qualify for them, but schools and organizations limit these highly competitive awards. Work-study programs are helpful, but it’s hard to cover all your expenses by simply working a part-time job on campus. There are plenty of companies willing to offer private loans with a cosigner, but many international students don’t have close family connections in the U.S. or Canada who are willing to take on this significant financial responsibility.

No-cosigner student loans are offered by companies that think differently about lending decisions. Most traditional lenders make lending decisions based on a student’s credit history, credit score, current income and assets that could be offered as collateral. Since international students typically don’t have a credit profile in the country where they want to study, they’re seen as a bigger risk, which is why some lenders require a cosigner.

Education loan providers offering international education loans without collateral or cosigners base their lending decisions on future-looking  factors. They look at your potential to succeed in school and in your career, rather than only looking at your financial situation. They may evaluate things like your academic record to date, your program of study, the reputation of the college or university where you want to study, and your potential income when you enter the job market.

With a no-cosigner loan, you can:

  • Stay financially independent. When you don’t have a cosigner, you won’t be indebted or financially tied to a family member or friend. You’ll be responsible for your financial decisions.
  • Avoid jeopardizing relationships. If you have difficulty making payments after you graduate, you won’t be damaging the credit profile or financial standing of a cosigner.
  • Build your own credit history. Making regular, timely payments on your loan allows you to start building your own credit history more quickly, laying the foundation for a strong financial future.
Three international students on campus

MPOWER Financing: No-cosigner student loans and more

MPOWER Financing is an international student loan company that offers no-cosigner student loans for international postgraduate students along with a variety of support services for international students. Founded in 2014 by two international students who understand how difficult it is to study abroad on a budget, MPOWER is dedicated to removing the obstacles international students face when pursuing degrees in the U.S. and Canada.

MPOWER offers:

  • Fixed-rate student loans: Students may apply for loans from US$2,001 to US$100,000. All loans include competitive, fixed interest rates which are inflation-proof and do not have prepayment penalties.
  • A quick and easy process: It takes just minutes to check eligibility for an MPOWER loan, and the process of applying is fast and easy as well. If eligible, students receive a quick conditional loan offer.
  • Career services: MPOWER provides access to career counseling, resume building workshops, interview preparation resources, job search tools and a large network of MPOWER alumni who have successfully found jobs in the U.S. and Canada.
  • Visa support: Services include a free visa support letter, visa preparation course, personalized mock interviews, live Q&A webinars and opportunities to talk with former U.S. visa officers about visa applications.
  • Financial services: MPOWER offers prequalified bank accounts and U.S. credit cards through its partners to ensure students have access to currency immediately upon entering the country.
  • No foreign exchange fees: MPOWER sends funds in U.S. dollars directly to your school, so you don’t have to worry about costly foreign exchange and bank fees associated with a loan from your home country.

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FAQs

What kind of financial aid is available for international students in postgraduate programs?

Financial aid for international students in master’s or doctoral programs includes scholarships, grants and assistantships offered by universities, private organizations and government agencies. Many graduate programs provide teaching or research assistantships, which offer a stipend and tuition waiver in exchange for academic work. Additionally, no-cosigner loans and private education loans can help cover remaining costs when scholarships and assistantships are not enough.

Can international students work while studying in the U.S. or Canada?

Yes, international students can work while studying, but there are restrictions. In the U.S., students on an F-1 visa can typically work on campus for up to 20 hours per week during the semester. In Canada, international students with a valid study permit can work both on campus and off campus, usually for up to 24 hours per week.

What’s the difference between in-state and out-of-state tuition in the U.S. and does it apply to international students?

In-state tuition is a discounted rate for students who are residents of the state where the university is located. Out-of-state tuition is significantly higher and applies to students from other states and international students. International students typically pay out-of-state tuition unless they qualify for special programs or scholarships.

Can international students get financial aid from the U.S. or Canadian governments?

Generally, international students are not eligible for federal financial aid in the U.S. or Canada. However, some provinces in Canada may offer financial aid programs for international students and certain U.S. states or universities provide institutional aid.

What’s the typical repayment period for no-cosigner loans?

Repayment terms for no-cosigner loans vary by lender, but they typically range from five to 15 years. Some lenders also offer grace periods after graduation before repayment begins, but this does increase the cost of the loan over time because interest continues to accrue during a grace period.


*Rates as low as 9.99% (11.16% APR). This interest rate and APR includes a 0.25% discount for automatic recurring payments.

DISCLAIMER – Subject to credit approval, loans are made by Bank of Lake Mills or MPOWER Financing, PBC. Bank of Lake Mills does not have an ownership interest in MPOWER Financing. Neither MPOWER Financing nor Bank of Lake Mills is affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. None of the information contained in this website constitutes a recommendation, solicitation or offer by MPOWER Financing or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.

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