If you’re in the U.S. on a H-1B visa, which allows skilled workers from abroad to be temporarily employed by U.S. companies in specialized occupations, you might be considering attending graduate school to further your career while you’re in the country. You might also need student loans to help pay for school, since the average cost of earning a master’s degree is $62,820.
Here’s what you need to know about student loans for H1-B visa holders, including where to get them, the application steps, and potential challenges to navigate, plus other college financing options to consider.
Key Points
• H-1B visa holders can apply for private student loans but not federal ones.
• Challenges include limited U.S. credit history and being seen as high-risk borrowers.
• H-1B visa holders may need to add a cosigner to a student loan in order to qualify.
• The loan application process for H-1B visa holders includes gathering documents, comparing lenders, and submitting a completed application.
• Alternatives to student loans for international students include scholarships and grants.
Can H-1B Visa Holders Attend School in the U.S.?
H-1B visa holders are allowed to attend school in the U.S. So if you are an H-1B visa holder and you’ve been wondering, can you study on an H-1B visa while working in the U.S.?, the answer is yes, as long as you maintain your employment and H-1B status while going to school.
Another question that often comes up among visa holders is: Can H-1B holders study part-time? International students with H-1B visas can enroll in degree programs or nondegree programs, such as a post-grad certificate program, on either a part- or full-time basis. This way they can work and go to school.
Can International Students Apply for Student Loans?
Given the high cost of education in the U.S., many individuals, including international students, use student loans to attend college. But obtaining student loans as an H-1B visa holder can be challenging. International students have fewer financing options than American students to pay for college tuition.
Federal student loans are reserved for U.S. citizens and eligible noncitizens, which includes individuals in the following categories:
• Permanent resident, also known as green card holder
• Arrival-Departure Record (I-94) Record holder
• Citizen of the Federal States of Micronesia, the Republic of the Marshall Islands, or the Republic of Palau
• You or a parent has T-1 nonimmigrant status
• You or a parent are a battered immigrant-qualified alien
If you are ineligible for federal student loans, as many H-1B visa holders are, you can look into scholarships and grants to help pay for college. In addition, you may qualify for other types of financing, including private loans for college.
Private Student Loans
If personal savings, scholarships, and grants aren’t enough to cover the cost of school, H-1B visa holders can apply for private student loans to fill the gap.
Private student loans are offered by banks, online lenders, and credit unions. They can help borrowers cover the cost of attendance at college. Private student loan interest rates may be fixed or variable, and borrowers are charged interest on their loans while they’re in school. H-1B visa holders can shop around for international student loans and compare multiple lenders to find the best rate and terms.
Student loan requirements vary by lender, but borrowers are typically evaluated based on their ability to repay the loan. Lenders consider your financial situation, such as your credit score and income. They may also ask for visa documentation as well as confirmation that you’re enrolled at an accredited school or qualified educational program.
If you get approved for a student loan, keep in mind that you can always choose to refinance student loans in the future, ideally when you might be able to qualify for a lower rate and more favorable terms. With refinancing, you replace your current loans with one new loan that has one monthly payment, which may be easier to manage.
Recommended: Refinancing as an International Student
What to Expect When Applying for an International Student Loan
Preparing in advance and organizing the materials you’ll need can help streamline the application process for an international student loan. Compile proof of income, such as pay stubs or a letter from your employer, as well as visa documentation and your U.S. address. And be sure to add up your anticipated education expenses so you’ll know exactly how much of a loan to apply for.
As mentioned, lenders will consider your credit history in the U.S. when you apply for an international student loan. If your credit history isn’t robust enough, finding a cosigner for the loan could improve your chances of qualifying and securing more favorable loan rates and terms.
How to Get a Student Loan as a H-1B Visa Holder
There are multiple steps in the application process for a student loan. Here are the actions H-1B visa holders need to take.
Gather Documentation
Although the specific process can be different from lender to lender, there are certain documents you will likely need to provide. Make sure to have on hand:
• Acceptance letter or proof of enrollment from a college or graduate school
• Anticipated graduation date
• Loan cosigner name and information if applicable
• Pay stubs and financial statements
• Transcripts from any prior higher education
• Valid passport with an expiration date beyond your anticipated graduation date
• Visa documentation
Compare Lenders
Loan terms can vary between lenders, so it’s important to compare offers. To do that, prequalify with multiple lenders to help find the best deal. You can typically complete prequalification on a lender’s website.
Once you have several offers, look at the interest rate of each one, since it impacts how much you’ll pay over the life of the loan. Also, note whether it’s a fixed or variable rate.
Fixed interest rates are locked in for the entire loan term, so your monthly loan payment stays the same. Variable rates fluctuate with the market, which can change your monthly loan payments, making variable rate loans riskier and harder to budget for.
As you’re comparing lenders, check to see if there are any loan fees you’ll need to pay and explore what the repayment options are. For example, some private lenders may offer different term lengths to pay off the loan.
Submit an Application
After determining which lender best suits your needs, submit a loan application. Go over the form carefully to make sure you’ve completed it accurately and that you’ve supplied all the necessary information to avoid delays or having your application denied.
Review the Offer and Sign the Loan Agreement
The lender will inform you once they’ve made a decision, which could take up to several weeks. Review the loan agreement to verify that the terms, including the interest rate and repayment plan, are correct.
If the loan terms meet your satisfaction, sign and return the agreement — typically called a promissory note — to the lender.
Possible Challenges for International Students
While international students can secure financing to help pay for college in the U.S., there are challenges involved. These are some of the most common ones.
Limited Credit History in the U.S.
H-1B visa holders may not have had a chance to build up a credit history in the U.S. Lenders might consider them to be high-risk borrowers, which could mean that they get a loan with a higher interest rate or need a cosigner to qualify.
Recommended: 10 Strategies for Building Credit Over Time
Finding a Cosigner
If an international student does need to add a cosigner to qualify for a student loan, they will have to find a person who agrees to take on that obligation.
Since a cosigner is legally required to repay the loan in the event the student can’t, finding someone willing to assume this responsibility can be difficult. A cosigner should be someone with a solid credit history, and they must also be a permanent resident of the U.S.
Time Limits on an H-1B Visa
International students might be considered high-risk borrowers by lenders since their stay in the U.S. is temporary. They can have their H-1B status extended up to a total of six years until they must leave for at least a year before re-entry into the country. Lenders will consider this timeframe when evaluating a student’s loan application.
The Takeaway
A private student loan for H-1B visa holders may be an option to help pay for college or graduate school while working in the U.S. International students often need a cosigner to qualify for student loans, unless they have an established credit history in the country.
Other options international students can explore to help pay for college include applying for scholarships and grants. And if H-1B visa holders do obtain private student loans with terms they consider less than ideal, they can explore refinancing at some point to see if they might qualify for a lower interest rate or more favorable terms.
Looking to lower your monthly student loan payment? Refinancing may be one way to do it — by extending your loan term, getting a lower interest rate than what you currently have, or both. (Please note that refinancing federal loans makes them ineligible for federal forgiveness and protections. Also, lengthening your loan term may mean paying more in interest over the life of the loan.) SoFi student loan refinancing offers flexible terms that fit your budget.
FAQ
Can you get student loans on H-1B?
Yes, it’s possible to get a student loan on a H-1B visa. Although H-1B visa holders are generally not eligible for federal student loans, they can apply for private student loans. But they may need a cosigner to qualify for these loans unless they have a strong credit history in the U.S.
Can H-4 visa holders get student loans?
H-4 visa holders, who are typically spouses and children of H-1B visa holders, are not eligible for federal student loans. However, they might qualify for private student loans. While not all private lenders offer loans to H-4 visa holders, some do. Look for a private lender that works with borrowers with an H-4 status, and be aware that you will likely need a cosigner on the loan.
Can international students get education loans in the USA?
International students aren’t eligible for federal student loans, but they can apply for private student loans from a private lender like a bank, credit union, or online lender. Lenders look for borrowers with a strong credit history in the U.S., so if an international student doesn’t have that kind of credit, they may need to add a cosigner to the loan in order to qualify.
Photo credit: iStock/AzmanL
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