For a long time, African students have heavily relied on scholarships to pursue studies abroad. Unfortunately, there aren’t enough scholarships available to meet the enormous demand.
The good news is that there’s another funding option for African students studying in global universities – international student loans.
However, unlike scholarships, you’ll have to pay back all the money you receive on student loans. You’ll also have to pay the interest accrued on your international education loan.
With that in mind, it’s important to take steps to minimize student loan debt as an international student. Let’s explore the most effective strategies to minimize your student loan debts:
Exhaust Other Funding Options
Before applying for an international student loan, it’s advisable to exhaust all your other funding options. These funding options include:
- Personal/family funds
- Financial aid from your school
Once you’ve maximized these options, then you can apply for an education loan to fill in any funding gaps. Doing so will keep the amount you have to borrow low, hence easier to pay off.
Work While Studying Abroad
Many international students take up part-time jobs while studying. The income from your job can help you pay your education-related costs and other living expenses, therefore minimizing your student loan debt.
Common part-time jobs popular with international students include:
- In food service
- In retail
- Research assistant
You may also be able to find a part-time job in your field of study – which will help you to start building your professional skills and network.
In the US, international students are allowed to work for up to 20 hours per week when classes are in session. When classes are not in session, international students can work for up to 40 hours per week.
Limit Your Living Expenses
As an international student on a tight budget, it’s important to be frugal with your living expenses. Living expenses include housing, meals, transportation, clothing, and entertainment. If you’re careless with your finances, these living expenses can quickly add up to thousands of dollars.
To minimize your student loan debt, you need to manage your funds wisely.
If you’re in the habit of spending without a budget, it’s time to adopt one. A budget will help you determine how to allocate money for your expenses while studying abroad. It will help you figure out exactly how much you have in income and how to spend it wisely.
While a simple spreadsheet will do, you can download and us any of the numerous budgeting apps available online. Some of the best budgeting apps for students include:
- Mint — a free app that helps you compile all your accounts in one place
- Wally — which is similar to Mint. However, you’ll have to manually record your transactions
- Rakuten —an app that helps you earn some cash back for online transactions
- Digit — a budgeting app that automatically connects to your account
Borrow Only the Amount You Need
While you might not be required to start making payments immediately, student loans are not free money. The more money you borrow, the more you’ll have to pay. Borrowing more money might also mean a longer repayment term.
You don’t want to leave school with the dread of unmanageable debt hanging over your head. Before applying for a student loan, calculate how much you’ll need to fill in your funding gap. Go for a right-fit student loan that will provide the amount that you need.
8B allows students to borrow a minimum of $5,000 USD and a maximum of $50,000 USD per academic year. The lifetime maximum you can borrow from 8B is $100,000 USD.
Understand Your Loan Payment Options
As we’ve discussed, you’ll be required to pay back all the money you receive on your student loan…with interest.
When researching where to get an education loan, you’ll realize that each lender has their set of repayment options. Common student loan repayment options include:
- Immediate repayment: Where you’re required to start making payments as soon as the loan is disbursed. This option means that you’ll be making payment on your loan while in school.
- Deferred repayment: Where you’re required to start making payments after graduation and at the end of the grace period. This option means that you won’t be making any payments on your loan while in school.
- Interest-only repayment: With this option, you’ll have to start making payments as soon as the loan is disbursed. However, you’ll only be paying the interest.
- Partial repayment: With this payment option, you’ll also be making payments while in school. Unlike with interest-only payments, you’ll be paying a fixed amount. For instance, you may be required to pay $25 each month.
Make sure that you fully understand the payment options available to you. Discuss with an expert to figure out which option is best for you, considering your financial situation.
Know Your Salary Expectations
Before applying for an international student loan, it’s important to know your salary expectations. How much does an entry level job in your field pay? What is the average salary in your field? How much can you expect to earn over your lifetime?
Having this information can help you determine what is affordable for you to borrow. Aim to have loan payments that you can easily pay off with your starting salary.
Consider going for majors with high starting salaries, such as STEM (science, technology, engineering, and mathematics) majors. Other high-ROI majors include business, law, and medicine.
If you need financing to fill funding gaps for your studies in the US, 8B is here to help. You can apply for an international student loan without a cosigner or collateral.
Join the 8B Community to network with other African students in global universities.