Tips for students planning to study abroad without breaking the bank

By Ashish Fernando

The cost of studying abroad has been on a steady rise over the past decade. Because of the high cost of tuition, rising living expenses in big cities, and unfavorable currency exchange rates, many aspiring students consider investing in international education one of their most significant financial decisions.

For instance, tuition and living expenses are estimated to total around US$60,000 per year at the very best US university, many of which are private non-profit institutions. However, you will find much lower fees in public universities/colleges.

Need for Education loan

In recent times, there has been a notable upsurge in the inclination of students to pursue education loans to fund their academic education overseas. This growing trend can be attributed to various factors. One prominent reason is the escalating costs associated with tuition fees, which have soared to unprecedented heights.

Consequently, students find themselves compelled to explore alternative avenues for financial support, and education loans present a viable solution. Moreover, pursuing a high-quality education is another driving force behind the increased demand for loan applications. However, foreign universities often come with exorbitant price tags, rendering education loans an indispensable resource for those aspiring to seize these opportunities.

Understanding the loan landscape

Educational loans unlock the great potential for quality education abroad. Hence, gaining the correct educational loan information will equip you with the necessary tools to pursue your academic goals without undue financial strain.

Educational loans come in various forms, such as government-sponsored schemes, private loans, and scholarships. ‘Pradhan Mantri Vidya Lakshmi Karyakram’ oversees the administration of scholarship programmes and educational loan programmes to provide students with the freedom to pursue higher education. Alternatively, you can also apply for loans from private banks. Private student loans can be applied for directly through the lender’s website, by mail, phone, or in person at a bank office. Unlike other retail lending, education loans include a moratorium period and a one to two-year extension for debt repayment.

Undergraduates do not need to undergo a credit check. Still, parents and guardians must meet specific requirements based on their income and any collateral used as security before they may be granted credit. Apart from banks and non-banking finance companies (NBFCs), several other lenders fund overseas education. International organizations like Prodigy Finance and MPower Financing grant education loans to students. Several universities also assist international students in getting loans in their particular countries.

However, investing in thorough research is essential before you decide on anything. When seeking any educational loan, comparing interest rates, repayment options, and loan benefits is critical. It will help you choose loans that best suit your financial needs and long-term objectives while minimizing borrowing expenses.

Also, before applying for a study loan, it would be beneficial for you to consult an overseas educational consultant who can provide factually correct information about the different scholarships available as per the course and your application. You don’t have to apply to only one but rather multiple scholarships. However small or large the grant is, it always helps. So, consulting an educational expert to explore all the relevant scholarships is definitely an intelligent move.

Financial planning and budgeting in studying abroad

Financial planning and budgeting help in estimating the affordability of the course. The assessment should consider various factors like income, savings and existing financial obligations. A comprehensive evaluation will assist you in making a well-informed decision.

Carefully analyze your educational objectives, weigh the prospective earnings opportunities after graduation, and take into account the ROI in your chosen field of study. The importance of strong financial preparedness cannot be understated. It not only helps provide insights on estimating the total cost of studying abroad, including tuition, living expenses, and additional costs, but also facilitates plans to undertake such costs.

Researching living costs, categorizing expenses, creating a detailed budget, tracking spending, looking for affordable housing, taking advantage of student discounts, using public transportation, preparing meals at home, purchasing used textbooks, and looking into scholarship opportunities are a few helpful tips for students planning to study abroad without breaking the bank.

Don’t miss loan repayment strategies

For effective money management and fast payback of an educational loan, it is essential to develop a repayment plan in advance. This entails creating a post-study budget, looking into work options, being thrifty, and making loan payments on schedule. Income-driven repayment plans, loan consolidation, or refinancing options can provide relief in the repayment of educational loans. They make repayment easier by providing manageable monthly payments based on income, consolidating several loans into one, and possibly lowering interest rates.

Conclusion

Applying for an educational loan might sound tedious, but it is quite a crucial element of your study abroad dreams. Conducting in-depth research, making a reasonable budget, and investigating accessible options will instill you with confidence as you begin a transformative educational experience without undue financial strain.

(Author is Founder, and CEO, iSchoolConnect)