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The International Student's Helpful Guide to Financial Aid

US financial aid can be confusing for any student but especially international students. Here's a guide to help you figure it out before you choose a school.

Universities in the United States are as diverse and abundant as the international students who attend them—students from all over the world with many aspirations and goals. It’s no secret that these students are looking for their best overall university match; yet, financial concerns are often either overlooked or excluded altogether from that decision. This is a critical error, as your final university choice cannot be made outside the context of affordability. What exactly is affordability? The textbook definition is the ability to spare money with little inconvenience. Of course, given that total costs for many US universities are well over $40,000 per year, one would need to spare quite a bit of money to not be inconvenienced. So how do countless international students manage to attend US universities and colleges in light of the financial burden? They do it by considering costs, financial aid, and affordability comprehensively and from a number of angles. 

It all begins with college costs

The true cost of higher education in the United States can be confusing to students and their families. Students often make their school choice based on the perception that the higher the cost, the greater the quality. But you'll soon learn that cost and quality are not always related, and university costs differ greatly from school to school—and even from student to student. Let’s take a closer look at what those different costs entail.

Direct, total, and I-20 costs

These terms are often loosely shared and interchanged, but they mean very different things. Direct costs are the sum of a university’s tuition, room, board, and fees. Total costs usually include books, supplies, and travel in addition to direct costs. I-20 costs will often be the higher amount, including all anticipated costs that a student might incur during the first academic year: tuition, room, board, books, health insurance, and fees. If you're an American citizen living abroad, look at a total cost to include travel for financial aid purposes. If you're not an American citizen, you'll have to show that you have the financial resources to cover the I-20 costs listed for any given school. Every school will have different costs at each level.

Double-check: Ask your potential universities about total costs and I-20 costs. Don't simply accept direct costs as the true cost of attendance.

Public or private costs

Public colleges and universities in the United States are operated by government entities, usually at the state and county level. Each state has its own system of higher education funded by residents through taxes. Public universities are much less expensive for the residents of the state where the university is located. But if you aren't a resident of the state, you'll pay out-of-state costs, which are often as high as private university costs. Private universities are not government owned and operated, meaning they're not obligated to make accommodations for students based on residency. Private universities are often mission driven. They derive their funding from tuition and fundraising efforts and typically offer many forms of merit-based financial aid.

Double-check: Look for differences in costs based on your residency. Will you have to pay higher tuition and fees if you're not a resident of the state where the school is located?

Need-blind or need-aware admission

Need-blind admission means your acceptance (or denial) to a university is determined using only your academic profile. Your ability to pay the educational expenses has nothing to do with your academic preparation. However, as an international student, you'll need to show proof of financial ability in order to get Form I-20. Need-aware admission means the university will assess both your academic profile and finances as a basis for admission. If you can't demonstrate both the required academic preparation and the ability to pay some or all of the university’s costs, then you won't be considered for admission.

Double-check: Ask if a university makes need-blind admission decisions. If not, then you may be wasting your efforts on universities that won't give you the time beyond admission to establish sources of funding that are required for issuing Form I-20.

Related: What Does Need-Blind Really Mean With Financial Aid?

Types of financial aid

Now that you have a better understanding of university costs, you're in a stronger position to consider other aspects of affordability. Without a doubt, financial aid in its many forms helps make education affordable. But much like determining cost, financial aid applications can also be confusing. Prepare yourself for the financial aid application process by examining all the sources of aid that impact affordability. Financial aid awarded by a university is often called institutional or campus-based aid, and it generally takes two forms: need based or merit based.

Need-based aid

As the term suggests, this type of funding is tied to a student’s inability to pay for their education. If you're an American citizen, you may file the Free Application for Federal Student Aid (FAFSA), which will determine your financial need and eligibility for federal and state grants and loans. The form is available at fafsa.ed.gov and can be completed starting after October 1 in the year preceding the semester you want to enroll. You also need to file the FAFSA each year you are enrolled at university. The federal deadline typically falls in late June. However, many colleges have a deadline of May 1 preceding the start of classes in the fall and subsequent years as undergraduate students. Make sure you know the exact FAFSA deadlines for your potential universities.

Once filed, the FAFSA is used to calculate your Student Aid Index (SAI), formerly referred to as your Estimated Family Contribution (EFC). Your financial need is the difference between the total cost of university for one year and your SAI. You can determine the total cost of the university by researching costs for each school or asking directly. You won't know your SAI until you complete the FAFSA and list the schools for which you hope to be considered for financial aid. As long as you list your institutions of choice on the FAFSA and have been accepted to those schools, then you should get a financial aid package based on the above formula.

If you're not a US citizen, you won't be able to file the FAFSA. But several universities have need-based aid for international students, including some of the most prestigious schools in the country. If a university has need-based financial aid for international students, they'll have you complete an institutional form, which will likely include information about your family’s financial resources and assets. The university will then use that form to determine your eligibility for need-based aid. You should ask about the availability of need-based aid and, if available, what the application process entails. Typical sources of need-based aid include:

  • Institutional or government grants: This free money is typically tied to financial need and does not need to be repaid. Only US citizens can receive government-level grants.
  • Subsidized and unsubsidized student loans: Subsidized means the government will pay part of the interest rate during a fixed time for the loan; they're only available to US citizens through the completion of the FAFSA. International students will need a US-based guarantor (co-signer) to take out a US-based loan.
  • Work-study: These funds are provided through campus-based jobs. Unlike loans and grants, work-study funds are paid to you as you work and earn the money, usually on a biweekly or monthly basis. Federal work-study jobs are also a result of the FAFSA and, thus, only available to US citizens, although many colleges have work-study funds for international students as well. 

Double-check: Stay on top of deadlines for financial forms, and make sure you know what aid is available for American citizens versus international students at the universities you’re considering.

Merit-based or gift aid

Many sources of financial aid are merit-based scholarships and awards (what some people call “gift aid”). Merit-based aid is broadly related to three categories: academic, athletic, and non-academic merit. Academic scholarships vary in amount and are tied to your academic profile (e.g., grades/marks, test scores, etc.). In short, the better your academic profile, the more generous the scholarships tend to be. In researching potential scholarships and other merit aid, be careful to note any deadlines and eligibility criteria that might differ from the requirements for admission. For example, some colleges and universities don't have application deadlines, but they do have scholarship deadlines. Other schools may not require SAT scores for admission but will for scholarships consideration. Coaches award athletic scholarships as a way to attract exceptional talent for intercollegiate athletic teams. In the United States, most universities belong to either the NCAA or NAIA athletic associations, which regulate the awarding of these scholarships. (Note: Schools in NCAA Division III can't award athletic scholarships.)

Non-academic merit aid recognizes unique attributes and talents of students not related to grades or test scores. Many universities will offer awards simply because you come from another country. Some universities will offer talent awards for achievement in music, the performing arts, or other applied arts programs. You may earn an award because you come from a particular faith tradition or for your public service efforts. As with academic awards, you should verify application deadlines, processes, and contact information independently, since many admission offices don't handle talent awards.

Double-check: Note scholarship deadlines and processes that might differ from the requirements for admission. Also note the staff who handle the processes. International students should ask about awards and aid specifically for international students—a university may only have merit-based aid for US citizens.

Related: Great Scholarships, Fellowships, and Grants for International Students

Employment

Employment options exist for both US nationals and international students. For US citizens, most employment comes through work-study aid, as previously discussed. For international students, employment is restricted to four forms: 

  • On-campus employment is permitted for any international student on an F-1 visa—up to 20 hours per week when school is in session and full-time when school is not in session. Employment options will vary from school to school, but a college’s dining services and bookstore are two common employers of international students.
  • Optional Practical Training (OPT) is a benefit for international students on an F-1 visa after attaining a degree. It allows 12 months of paid compensation with an American employer as long as the work is related to the field of study. OPT is available after each level of degree (associate, bachelor’s, master’s, and doctoral). If you earn a degree in a STEM discipline (science, technology, engineering, and math), your OPT could be extended to 24 months.
  • Curricular Practical Training (CPT) is a benefit for international students on an F-1 visa while they're pursuing a degree. As long as your work is related to your studies and connected to your degree requirements, you're allowed to work off campus for pay. Unpaid internships must also be processed as CPT. In all cases, your CPT should not exceed 11 months during your degree, or you'll lose your OPT benefit for that degree.
  • Economic Hardship employment beyond OPT and CPT is available off campus when sources of funding have been compromised, such as when a family business closes or death occurs. Employment must be approved by the federal government and cannot occur during the first year of study.

Double-check: All four forms of employment are facilitated through campus-based processes and usually through an international student office. Ask about employment opportunities on campus not related to work-study and need-based funds available only to US nationals.

Third-party support

After campus-based aid, most sources of funding for international students come from governments, corporations, foundations, and nonprofits. These sources are many and vary across regions and in requirements. It's not uncommon for corporations to sponsor students who will attain their degrees and return to work for the company. Similarly, non-government organizations (NGOs) have funding opportunities in some countries to “grow” future employees with needed skill sets. Many governments have generous levels of sponsorship, as demonstrated by countries in the Middle East, South America, and other regions that need specific skill sets. The American government also has funding opportunities for international students through its Fulbright Program or USAID. Finally, many private/independent organizations offer scholarships for which international students are eligible. Again, these awards vary greatly in scope, but with online research and support from the international student services office at your university, you can conduct a fruitful scholarship search now and after you enroll.

Double-check: Research third-party funding sources, especially online. Embassies and EducationUSA offices often have information on funding sources originating in their respective countries as well.

Related: Our Best Advice on Finding and Applying for Scholarships

Your and your family's finances

Regardless of your eligibility for financial awards and scholarships, you may have additional costs to cover after all external sources of funding have been exhausted. If you're an international student, this consideration is critical to obtaining your I-20 and student visa. According to an Open Doors Report from the Institute of International Education, approximately two-thirds of international students rely on personal and family financial support as their primary source of funding. You may need to access those funds to support your education for one academic year as determined by your university’s I-20 cost. In fact, a university will not be able to issue your I-20 until all of your sources of funding equal or exceed the cost of attendance as required by the I-20. Bank statements or a statement of financial assets from a financial institution are the most common documents used to show a family’s resources. Whether you're a US national or an international student, it's only natural for your family to exhaust external sources of funding before using personal resources; thus, it's critical for you and your family to fully understand the total cost and other sources of funding you can obtain.

Double-check: What is the remaining cost of all educational expenses after applying for all external sources of financial aid? Does your family have personal resources in any form to cover these expenses?

Student visa considerations

If you're an American citizen living abroad, you don't need an F-1 visa before entering the United States for your education. If you're an international student, you won't be able to get your F-1 visa until a US consular officer approves you. You can't make your visa appointment at the US Consulate until you receive your I-20. And you won't receive your I-20 until you've been accepted academically and have demonstrated financial ability for any one university. You can see by this sequence just how finances will affect your ability to study in the United States. In fact, the consular officer has the discretion to make further inquiries into your finances as needed. Requests for income statements and greater scrutiny of a family’s financial assets aren't uncommon to ensure that you don't go to a school that you ultimately can't afford, now or in the future.

Double-check: What other documents does the US Consulate need for your visa interview? Do they include additional financial statements?

After the start of classes

Both US citizens and international students will have other means to support their educational expenses once they get to campus. One of the most overlooked options is the tuition payment plan in its many variations. Most universities won't require you to pay the total cost for each semester in full and up front; instead, you may be given up to 12 months to pay your educational expenses using such a plan in return for a processing fee. As for financial aid, academic departments may provide small scholarships as an incentive or to recognize strong academic performance. You should ask about the availability of such funds and their requirements.

Double-check: Are there payment plans or other forms of financial aid available after the start of classes? Will you need to maintain a minimum GPA to keep any form of merit-based aid?

Financial aid questions international students need to ask

Ask all your schools of interest the following questions to make sure you don’t miss a step or an opportunity.

  • What are the total costs for a US student or I-20 costs for an international student?
  • Is there a difference in cost based on state residency at any level?
  • Is the university need-blind or need-aware in its admission decisions?
  • What need-based and/or merit-based aid does the university have for international students?
  • What are the deadlines and processes for either merit- or need-based aid?
  • Are there employment opportunities on campus for international students?
  • Are there third-party sources of aid?
  • What payment plans are available for prorating or distributing educational expenses over a year?
  • Are there other forms of financial aid after a student begins classes?
  • Must I maintain a minimum grade point average or stay in my major to keep an award or scholarship?

Related: Common Financial Aid Questions Answered by an Insider

With careful research, reflection, and time, you can ask the right questions of the right people to determine which university is your best financial choice. The cost of not going to the university that best suits your needs—or of not going to university at all—is far too great.

Find universities that will provide you with the aid you need with this list of featured colleges looking for international students

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