Loans for International Students in Canada

Many international students planning to study in Canada will be looking for financial help to meet their educational costs. For a limited number of students, some financial help is available as a grant or scholarship which does not have to be repaid. These popular options may meet only a part of the total study costs, and most students will need a loan to cover some, or all, of the remaining costs.

Co-signers

Most international students who wish to apply for a loan will also need a co-signer. This is a responsible person with a good credit record who, together with the student applicant, is prepared to guarantee that the loan will be repaid on time. A co-signer is necessary because loan providers feel most students will not have enough evidence to establish their own personal credit record.

Different loan providers have different rules about co-signers. Sometimes a co-signer can be a resident of your home country – perhaps a family member. For some loans, graduates may borrow most, or even all, of their education costs without the need to have a co-signer guarantee the loan.

Loan Sources and Applications

When you begin to look for a loan provider, it will help if you organise your search very carefully. It’s usually best to search for loan providers in the following order:

1. Home country

You may well get the best advice of all from your home school or college. They will know you well and know all about your home education system. Arranging a loan in your home country, where everything is familiar, has many advantages. For example, you and your family will know how and where to get advice, your government’s education department will have handled such enquiries before, and there may well be companies and institutions in your country with strong Canadian links – or others very keen to establish such links. Also, the ‘co-signer’ type of arrangement may not apply to your country’s residents wishing to study abroad.

2. College and university schemes

The Canadian university or college you have chosen for your studies will understand that many international students will want to arrange a loan to fund their education costs. Staff in the international student office at these institutions will be very welcoming, and will have helped countless numbers of students through the same loan process. You will probably find they are the very best people to help with all the detailed information you need.

3. U.S. students

For U.S. students wishing to study in Canada, the process has been long-defined. Canada is a neighbouring country and the educational loan arrangements to meet the costs of Canadian studies are long-established.

Loans and Scholarship Opportunities

Remember that scholarship awards can help meet some educational costs and do not require repayment. The Scholarships for non-Canadians site has lots of detailed information, and the organisations listed below may also be good sources of scholarship awards or other financial assistance.

European Union initiatives:

Leonardo awards scheme
Socrates awards scheme

European Commission scholarships for international students from developing countries:

Erasmus Programme for student exchange
Comenius Programme student-teacher awards

The African Educational Trust

International agencies:

IFUW (International Federation of University Women)
WHO
UNESCO

Voluntary organisations:

Charities, religious bodies and similar voluntary groups occasionally award scholarships, so be sure to check those you are familiar with.

Student loans – campaign

Later this month (March), I will finally pay off the student loans I took out in the 1990s. These were maintenance loans: I graduated before the introduction of what were called ‘topup’ fees (at first £1 000 per year), and amounted to just under £5 000 when I finished. It has taken me nearly 14 years to repay that debt.

I enjoyed the protection of the Consumer Credit Act, a low interest rate set in statute, and a generous repayment threshold. In 2009/10, my interest rate was -0.4% – that’s right, I received credit on my outstanding balance. This is because interest was calculated at RPI minus 1 percentage point and RPI had been 0.6% in September 2008.

In 2001, the repayment threshold was £20 696, by 2005 it was £22 764. I was thus able to defer repayment. Once the threshold was crossed, 60 equal monthly repayments were made to clear the outstanding balance. Repayments were tied directly to the amount borrowed.

The advantages and protections of these pre-98 loans persisted even after the balances were sold to the company that became Thesis Servicing.

Since 1998, we have seen many changes in the loan scheme – all affecting new cohorts. The most obvious is the introduction of income contingent repayment loans which means that the monthly repayments are relative to income, rather than initial amount borrowed. The original debt taken can limit the total amount repaid, though it is more likely for most that the debt will be written off (after 25 years after graduation for those with recent loans, 30 years for those taking out the new loans in 2012/13).

What concerns me is not simply the complexity of income contingent repayment loans, but that many of the protections I enjoyed have been removed.

The new loans are not covered by the Consumer Credit Act and interest rates can be set at the discretion of the relevant Secretary of State using secondary instruments, as can the other details of the scheme, such as the repayment threshold (and percentage determining level of repayment). Although the current government has stated its intention to set real rates of interest (ie above inflation) it has given itself powers to set rates much higher than that.

The 2011 Education Act, which received Royal Assent last November, Education Act now allows governments to set up to market rates of interest on student loans using statutory instruments (rates must be “lower than those prevailing on the market, or no higher than those prevailing on the market, where the other terms on which such loans are provided are more favourable to borrowers than those prevailing on the market.”)

Having recognised this lack of statutory and legal protection, what do the terms and conditions of the student loan agreements say?

The clause that currently appears in the 2012/13 “STUDENT LOANS – A GUIDE TO TERMS AND CONDITIONS” allows future administrations great leeway to change terms and conditions.

“You must agree to repay your loan in line with the regulations that apply at the time the repayments are due and as they are amended. The regulations may be replaced by later regulations.” (p. 8)

It is clear that the loans are not merely income contingent, but future-policy contingent.

With such long lifetimes, much higher debt and higher interest rates, this kind of contingency is unacceptable.

education loans are a gamble too far for adult learners

Over the last 18 months, attention has focused on the widespread outrage over the government's tripling of tuition fees in higher education. But equally controversial proposals have been looming on the horizon for the further education sector. They've been largely under the radar, but they could derail learning opportunities for tens of thousands of adults across England.

The government announced in its 2010 spending review that it would scrap all the financial support it currently gives to students aged 24 and above studying A-level equivalent courses, and replace it with a system of loans based along HE lines for the academic year 2013-14 onwards.

Currently, the government provides students with grants for about 50% of the cost of these courses. Colleges charge the remaining sum in fees.

As a result of the reforms, colleges are likely to at least double their fees. Students will pay these fees in the first instance through loans. When students complete their courses and start to earn £21,000 or more, they will pay back the loans.

The coalition has no real evidence to suggest that the majority of people will feel either able or willing to take on such loans and plenty to suggest they will not, especially given the gloomy economic climate.

People who have had bad experiences of education often have to be supported and incentivised towards adult learning. The fashionable phrase in government circles for this sort of thinking is "nudge theory",but it is possible to nudge people away from things as well as towards them, especially when they are looking at having to take out loans of up to £4,000 a year.

Although it announced the FE loans policy in October 2010, only now has the Department for Business, Innovation and Skills (BIS) begun its market research, despite ministers wanting to have the changes signed off and ready to present to parliament before this summer for introduction in early 2013. Even their initial projections and modelling are based on a frank assumption that at least 20% of existing adult learners on such courses will fall by the wayside as a result of these changes.

So far, there has been little attempt to assess whether the Student Loans Company – which is supposed to take on the administration of this scheme – has the capacity to handle FE loans.

The government has underestimated the difference between the relative homogeneity of HE provision in terms of start dates, duration and course fees, and the multitude of options across FE.

The current plans also fail to ensure science and maths courses in FE are afforded the same protection as their HE counterparts. If we are looking to improve the science and maths skills base in higher education, surely protecting provision at FE colleges for those who may have missed out should also be of vital importance.

The coalition seems determined to introduce fees for access-to-HE courses, which are designed for those who missed out on university the first time. This looks set to hit women hardest as 70% of students enrolled in access courses in 2009-10 were female.

At a time when colleges already face a 25% funding cut in their resource grant from BIS, what is the likely impact on their viability if the number of adult learners starts to drop rapidly following the introduction of loans? At the very least we may see the number and range of courses available in FE colleges cut sharply, which in turn could lead to reductions in staffing levels.

What's more, all this follows on from the pressure the government has already piled on the FE sector with changes last year to funding for English for speakers of other languages (Esol) and the removal of the fee remission for students on inactive benefits. Isn't there something bizarre about expecting individual apprentices over 24, rather than their employers, to take on loan responsibilities when they are already taking a salary cut because of their training status?

FE colleges and other providers play a crucial role in supporting social mobility and aiding people's job and career prospects. The government should revise and revisit its "Big Bang" gamble on FE loans, which threatens to jeopardise learners and providers alike.

• Gordon Marsden is Labour's shadow minister for further education and skills

Student loans for adults

We've all heard about student loans in higher education. Now they are available for some adult learners in further education and training in England.

What are 24+ Advanced Learning Loans?

24+ Advanced Learning Loans have replaced government grants for some adult learners. They are an option for people aged 24 and over to fund their course fees upfront at Level 3 and Level 4 in approved colleges and training providers in England.

If you are under 24 or wish to gain a more basic qualification

You are not eligible for a 24+ Adult Learning Loan if you are under the age of 24 or aged 24 and over seeking your first basic skills qualification. If you are in this category, your learning will continue to be grant funded.

Combining study loans

You can take out a 24+ Advanced Learning Loan and then a student loan for higher education. Your loans will be rolled into one and only one monthly repayment will be made. If you progress to higher education after taking out a loan for an Access to HE diploma course, your 24+ Advanced Learning Loan balance will be written off, on completion of your HE course.

What about the repayments?

24+ Advanced Learning Loans are no different from any other form of borrowing – you have to meet the repayment conditions. Monthly repayments through the Student Loans Company will be a fixed proportion of your income, which start once you are earning over £21,000. Any balance outstanding is written off after 30 years. Repayments through the tax system won’t begin until 2016, but you have the right to make payments or to pay back your loan in full at any time before then without incurring penalties. You will need to contact the Student Loans Company to arrange repayment before 2016.

Student loans in America Nope, just debt

IN LATE 1965, President Lyndon Johnson stood in the modest gymnasium of what had once been the tiny teaching college he attended in Texas and announced a programme to promote education. It was an initiative that exemplified the “Great Society” agenda of his administration: social advancement financed by a little hard cash, lots of leverage and potentially vast implicit government commitments. Those commitments are now coming due.

“Economists tell us that improvement of education has been responsible for one-fourth to one-half of the growth in our nation's economy over the past half-century,” Johnson said. “We must be sure that there will be no gap between the number of jobs available and the ability of our people to perform those jobs.”

To fill this gap Johnson pledged an amount that now seems trivial, $1.9m, sent from the federal government to states which could then leverage it ten-to-one to back student loans of up to $1,000 for 25,000 people. “This act”, he promised, “will help young people enter business, trade, and technical schools—institutions which play a vital role in providing the skills our citizens must have to compete and contribute in our society.”

Almost a half-century later these modest steps have metastasised into a huge, federally guaranteed student-loan industry. On October 25th the Obama administration added indebted students to the list of banks, car companies, homeowners, solar manufacturers and others that have benefited from a federal handout.

Johnson's lending programme was altered almost straight away. The intention of providing students with an education through “business, trade and technical schools” was expanded to include the full, imaginative panoply of American education, regardless of economic utility. Interest rates and terms have all been adjusted numerous times.

The result is a shifting, difficult landscape only barely understood even by insiders. For students, the task is that much larger. They must choose between an array of products, including subsidised and unsubsidised “Stafford” loans (named after a Republican senator) via the William D. Ford loan programme (named for a Michigan congressman), loans directly from the government, “Plus” loans (for parents of dependent children) and “Perkins” loans (named after a congressman from Kentucky), plus an array of private options.

On top of all this, there are choices about how to consolidate, restructure and pay the debts. Many students are understandably overwhelmed. Deanne Loonin of the National Consumer Law Centre has one client with $300,000 in debt from a failed effort to become an airline pilot. That liability could have been reduced by a better understanding of products.

Two things, however, are clear. The size of student debt is vast (see chart), and lots of borrowers are struggling. More than 10m students took out loans for the latest academic year, according to a report issued on October 26th by the College Board, a consortium of academic institutions. Almost a third of students graduating from college, and 69% of the ones dropping out, hold debt tied to their education.

The total amount of debt is staggering. The New York Federal Reserve Bank puts it at $550 billion, but includes a footnote in the “technical notes” section suggesting this may be an underestimate. Sallie Mae, the school-loan equivalent of the housing industry's Fannie Mae and Freddie Mac, reckons there are $757 billion-worth of outstanding loans. A bank heavily involved in the area says there is at least another $111 billion in purely private loans, and with new lending estimated in excess of $112 billion for this year alone, the total amount outstanding will surpass $1 trillion in the not-so-distant future.

Critics allege a viciously wasteful circle: the size of the loan pool expands to enable students to pay ever higher fees to schools whose costs expand because money is coming their way. That was just about sustainable in the good times, a lot harder when there are fewer jobs to be had.

Signs of strain are everywhere. In September the Department of Education reported that in 2009 the default rate, which is defined as non-payment for 270 days, had reached 8.8%. By some estimates delinquency rates, an earlier indicator of stress, for student loans exceed 10%, ten times that for credit cards and car loans. Ms Loonin's average client has a low-paying job, $30,000 of debt and is in arrears.

This is despite punitive laws to enforce repayment. In response to clever students burying their obligations in court during the 1970s, anti-default provisions were imposed to make it almost impossible to shed student loans in bankruptcy. In 1991 the statute of limitations for non-repayment was eliminated.

Many troubled borrowers could avoid default if they used government options to consolidate their loans and make minimum payments, says Ms Loonin, but they are unaware of the possibility. Their primary contact with the industry after being granted a loan is through collection agents who are compensated based on how much they collect, and who therefore have little incentive to explain alternatives.

There are increasingly loud calls for reform of the system, with demands that range from a full-fledged bail-out of borrowers to a phased curtailment of government lending. For now the bail-out is the bigger priority for politicians. For many years government-backed loans were distributed through banks which earned a fee and occasionally had to assume a little bit of risk, but in 2009 the business was entirely absorbed by the federal government.

The changes announced this week are designed to ease the pressure on struggling graduates. Borrowers who qualify will get payment relief, not debt relief. Their payments will be capped at 10% of income rather than 15%, but interest will continue to be applied to their underlying debt and may expand rather than contract over time. There will also be forgiveness after 20 years, rather than 25. The administration says these changes will have no cost to taxpayers. If there is one lesson of the past 46 years, it is to be dubious of that claim.

Student Loans for International and Study Abroad Students

If you are looking for a student loan to fund your international education, we can help. Whether you are an international student in the US or a US student studying abroad – finding a student loan doesn't have to be difficult and with our student loan comparison tool you can find the right loan in seconds – and then apply online.

Why International Student Loans?

Studying overseas is expensive, and many students struggle to fund their international studies. Scholarships and grants are available, but they are very competitive and rarely cover all of your expenses. A loan can cover up to the total cost of attendance, as determined by your school, minus any other aid received.

Here are just a few of the costs your international student loan will cover:

Tuition
Room and board
Books and supplies
Travel and transportation
Health insurance
Living expenses

Even if you already have been awarded financial aid, you may find that you are still coming up short. In cases like these, international student loans can cover the difference – or they can cover the total cost of your education.

Personal Loan of $25,000 in US? Bank to apply? Credit History?

Recently, I wrote an article on the best way to pay off your education loan after Job. If you have read it, I have mentioned, I took a $25,000 loan in US and sent it to home country to save good amount of money. The question that might have come to your mind is, Where the hell should I apply to get $25,000 Loan ? Which bank should I apply ? How should I build credit history ? I will try to address some these things in this article and how I got my loan.

Importance of Credit History

Credit history in US is of significant importance, if you do not have good history…you are basically screwed…You do not want to commit any mistakes in the beginning (first few months in US) to build your credit history. Read this article on How to build good credit history in US. Anyways, if you have bad credit history, it is not a good idea to apply for a personal loan. It can even ruin your credit history more. You just need to know your credit score and assess how much history you have build before applying.

Which Banks to apply ? National or Local ?

Most of you might have an account in nationalized bank like Chase, Bank of America, US bank…the fact is, I would not recommend applying to the nationalized banks. Simple logic, there is too much hassle there and too many rules to deal with because you are dealing with a big bank on a national level. The odds are you getting approval with decent credit score is relatively less. So, where should you apply ? Ever heard of the credit unions ? Yes, you should apply in credit unions or local banks. Credit unions are very local and they usually deal with local customers and meant for community development and not just mere profit. They will have all the facilities you need and the size of the bank and attention you get is much more. I applied my loan in a credit union and got it approved. So, did my friends…

How to build a good relationship with Banks like Credit Unions ?

When I landed in US for the first time fortunately, I opened an account in a local credit union. I deposited some amount and then did not use it much. After 2 and half years, I called them and asked if I can apply for a personal loan and they said sure. I did some paperwork submitted my pay stubs and I got the loan approved. The reason I say this story is, I opened the account long time ago and had some transactions with them. I have been an old customer for them for 2 and half years…it is basically building the history of the account and not just credit history. Though my credit score was not super high, I got my loan approved because I was an old customer. So, if you plan to take such personal loans, I would recommend you to open one of those accounts in credit unions and do keep doing some transactions and just build some history. You have to be very careful; do not open too many bank accounts, unless needed.

Overall, just do not screw up your credit history by applying to every card that comes in mail. Try to build good credit history and if you have plans to take personal loan, open an account in a small credit union and build some history. Once you are prepared, at the right time with right credit history you can apply for personal loan and you will get it approved without any hassle.

Did you apply for any personal loans in US ? Any experiences ?

Student-Loan Defaults Rise in U.S. as Borrowers Struggle

About one in seven borrowers defaulted on their federal student loans, showing how former students are buckling under higher-education costs in a weak economy.

The default rate, for the first three years that students are required to make payments, was 14.7 percent, up from 13.4 percent the year before, the U.S. Education Department said today. Based on a related measure, defaults are at the highest level since 1995.

The fresh data follows the announcement byBarack Obama’s administration that it would seek to restrain skyrocketing college expenses by tying federal financial aid to a new government rating of costs and educational outcomes. The rising number of defaults shows the pain of borrowers, said Rory O’Sullivan, policy and research director at Young Invincibles, a Washington nonprofit group.

“Our generation is behind in the economic recovery and not recovering as fast as we need to,” said O’Sullivan, whose group represents the interests of people ages 18 to 34. “It’s financial disaster for borrowers. Defaults can dramatically affect their credit rating and make it harder to borrow in the future.”

270 Days

Today’s report covers the three years through Sept. 30, 2012. The default rate, which includes graduates and those who dropped out, shows the share of borrowers who haven’t made required payments for at least 270 consecutive days.

The rate doesn’t include those who are putting off payments, through deferral or economic hardship called forbearance, or borrowers who are on federal income-based repaymentprograms, meaning it understates their hardship, O’Sullivan said.

U.S. borrowers owe $1.2 trillion in student-loan debt -- including government loans and those from private lenders such as SLM Corp., commonly called Sallie Mae. That sum surpasses all other kinds of consumer borrowing except for mortgages.

Special Report: The Fight Over Financial Literacy

Last year, the Education Department revamped the way it reports student-loan defaults after Congress demanded a more comprehensive measure because of concern that colleges counsel students to defer payments to make default rates seem low. Previously, the agency reported the rate only for the first two years that payments are required.

Worst Performers

Public colleges reported a 13 percent default rate while nonprofit private schools had a rate of 8.2 percent. For-profit colleges fared the worst, at almost 22 percent.

Under the older two-year measure, the rate for all colleges was 10 percent, up from 9.1 percent the year before -- and the highest since 1995.

“The growing number of students who have defaulted on their federal student loans is troubling,” U.S. Education SecretaryArne Duncan said in a statement. “The Department will continue to work with institutions and borrowers to ensure that student debt is affordable.”

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