Originally published on January 9, 2019 by The Ren Pen.

Attending college in the US is expensive, but may not be as costly if approached thoughtfully. Rather, an American education can be a good investment with lifelong benefits. Coming from a middle-income family and being the first to study abroad, I tried to leave no stone unturned when it came to finding funding for my undergraduate degree from The Wharton School at the University of Pennsylvania (Penn) where I spent close to $160,000. Based on my personal experiences, I hope to share some insights on how to finance your US education. Broadly, there are four main sources of financing, and I utilised them all to varying degrees.

1) Loans:

Education funding and student loans are becoming extremely common option in India. Both, Indian and international companies are willing to lend to Indian students so that they can study in the US. However, each loan differs, sometimes greatly, in terms of the product and process.

While Indian banks and NBFCs focus more on secured loans that require collateral like a house, land and jewellery, among others, along with a co-signer, either parents or guardians, international loan providers assess a student’s future earning potential by analysing the student’s and the university’s academic qualifications. Generally, the terms and conditions regarding interest rates, repayment period, loan amounts and disbursement options from international lenders are clearer and better suited for Indian students.

For my education, I used two loans, one from an Indian bank and the other from an American provider, which helped cover a quarter of my total expenses. My loan application to an Indian public sector bank took 11 months to process and another month to disburse even though I went through a senior reference, while the US one took two weeks from the start of the application process to the receipt of funds.

2) College scholarships, student financial aid and work-study:

International students could also benefit from limited scholarships and financial aid. Most scholarships are merit-based and therefore are highly competitive, as a lot of students will have strong academic qualifications.

Financial aid, depending on the level of study, is mostly need-based and can affect the final admission decision for a student. For example, Penn is need-aware for international undergraduate applicants and may not admit a qualified candidate if they are unable to cover their expenses.

Work-study, or working on campus part-time, is a good option available to international students. These jobs can include working with a professor as a grader who marks exams or as a teaching assistant who conducts classes, tutoring other students in various subjects or even working in libraries and computer labs. International students are legally allowed to work an average of 20 hours per week on-campus in the US.

During my undergraduate degree at Penn, I managed two jobs–as a librarian and as a grader for an accounting professor. Apart from helping me cover some basic personal expenses, they also provided me with the opportunity to build my resume through unique experiences and perspectives. As the number of international students studying in the US increases, these opportunities are also improving, but are still difficult to rely on.

3) Private scholarships and grants:

Various companies, trusts and organisations, both public and private, offer grants and scholarships to study certain programmes or attend specific colleges. These options are usually available for graduate students and are meant to complement other sources, rather than be the primary source of funding.

With changes to the CSR rules in India, medium to large companies are also including education as part of these budgets. Further, international consulting firms and multinational companies have started assisting young employees through various tuition reimbursement programs and fellowships.

I was the recipient of a private scholarship, which helped fund about a quarter of my total expenses.

4) Family funds and personal savings:

Last but not least, funding from family and personal savings is still the largest and most common form of financing an American education. This is because it is the easiest and most convenient option. While it is important to have a certain amount of family and personal funding available, this should be utilised to help cover the other expenses after considering all other options.

After pursuing all the available options, my family (parents and grandparents) agreed to sponsor the remaining half of my education. Given the experience, exposure and expertise I gained, they were satisfied with their “investment.” An American education can be expensive, but proper planning and preparation can make it affordable.

Rohan Tibrawalla is a guest blogger for The Red Pen and Country Director, India for MPOWER Financing

© MPOWER Financing, Public Benefit Corporation
NMLS ID #1233542

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. © MPOWER Financing, Public Benefit Corporation 2019 NMLS ID #1233542. 1101 Connecticut Ave NW Suite 900, Washington, DC 20036