How do student loans and financial aid differ?

by Jennifer Calonia | In Guides and Tools | 28 March 2023 | Updated on: April 13th, 2023

Paying for a U.S. education can be expensive. This is why many domestic and international students seek financial help for their higher education costs. 

This kind of help is called financial aid. As you plan on studying at a U.S. college or university, you might have also heard about student loans for international students. 

But how do student loans and financial aid differ? Here’s what to know.

Types of Financial Aid for International Students

Financial aid can be broken down into a few options. Below are the main types of financial aid for international students that are offered. 

  • Scholarships is money that is awarded that doesn’t have to be paid back. It might be offered to students who have financial need or who are awarded based on academic success.
  • Grants. Grants are another type of aid that typically don’t need to be repaid as long as you fulfill all of the requirements of the grant program. 
  • Student loans. Education loans must be paid back, typically plus interest and possibly added fees. International students usually can qualify for non-federal student loans, but requirements are different across lenders.
  • Work-study. Some schools might allow international students to participate in a work-story financial aid program that uses non-federal funds. It requires you to work a job, sometimes on campus, while you’re enrolled in school. Although it only covers some of your school expenses, work-study funds can help.
  • Fellowships. Fellowships are usually offered to graduate students and are available as financial aid for international students. These awards provide financial assistance while helping students grow their professional and academic skills through training, research, or other activities. 

Financial Aid vs. Student Loans

Financial aid is any money-based assistance that’s meant for use toward college expenses. These expenses might include tuition and fees for your degree program, housing, books, and supplies.

There are different types of financial aid, and student loans are one kind of financial aid option available to international students. In other words, all student loans are considered financial aid, but not all financial aid are student loans.

Where to Find Financial Aid

Your home country might have financial aid awards for its citizens that can help you get your education abroad. A good place to start your search is through your government before departing, or with your country’s embassy or consulate office after arriving in the U.S.

You can also find financial aid for international students in the USA. Some schools offer special aid programs for international students, like institutional student loans, fellowships, or scholarships. Ask your school’s financial aid office about the financial aid you might be eligible for.

Nonprofit organizations in the U.S. also offer financial aid for international students. For example,  the Institute of International Education offers a database of grants, scholarships, and fellowship awards. Another source of financial aid is the International Education Financial Aid database at where you can find additional financial aid options that are specifically designed for students who want to study abroad.

Education Loan for International Students

When it comes to student loans for international students, you’ll find them through private loan lenders. Private international education loans might be available through your school or through a private bank or lender.

What to Look For

  • Eligibility Criteria. Review the lender’s visa, school, and program requirements, as well as other criteria to qualify. 
  • Annual Percentage Rate (APR). Compare the APR of each international student loan you explore. The lower your APR, the less you’ll pay toward your education debt.
  • Fees. Watch out for education loans that have high fees, like an application or disbursement fee. These fees add to your total cost of borrowing for your degree.
  • Borrowing Limits. Student loans have different minimum and maximum borrowing limits. Check whether the education loan meets your funding needs.
  • Cosigner Requirement. If you’re applying for a loan that requires a cosigner, make sure you meet the lender’s requirements. For example, a lender might require that you find a cosigner who’s a U.S. citizen or permanent resident.

Getting Financial Aid as an International Student

Depending on your school or the financial aid program, you might need to submit certain forms to apply for international financial aid. 

Submit an International Student Financial Aid Application

The International Student Financial Aid Application (ISFAA) is a paper application. It’s meant for international students who want to apply for financial aid, and are studying in the U.S. 

The ISFAA asks for the student’s and their parent’s information, and financial details like household income, assets, and expenses. You must also include existing financial aid you’ve received from other sources. If you have a special financial circumstance, you can explain it on the form. After filling out the application, submit it to the college or university that requested it. 

Complete a College Scholarships Service Profile

Hundreds of U.S. schools and third-party scholarship organizations use the College Scholarship Service (CSS) profile as a requirement for international students. 

The CSS is provided by the College Board. It’s an online application for nonfederal financial aid, like institutional scholarships and loans. You can find a list of schools that use the CSS in their financial aid process online. International students can fill out the CSS for a $25 fee. If you need extra CSS Profile reports, it costs $16 each. 

Even if international students are not eligible for federal financial aid, filling out the FAFSA might be helpful. Some non-federal aid programs require all applicants, including international students, to complete a FAFSA as part of the application process. Taking all of the steps needed to meet eligibility criteria can help you find more sources of financial aid for international students.

The Bottom Line

Financial aid is a broad word to describe money from a third-party source that’s provided to a student for their education. Even if you don’t qualify for U.S. federal financial aid as an international student, there are options to help pay for your education. 

Financial aid for international students includes scholarships, grants, and education loans. These can be found through nonfederal sources, like your school, home country, or independent organization. that offer scholarships and grants to international students.


Is financial aid available for international students in the USA?

Yes, financial aid for international students is available in the USA. However, international students face more restrictions with the type of financial aid they’re eligible for. International students are not eligible for federal aid, but typically can apply for nonfederal scholarships and student loans. 


What is the difference between FAFSA and financial aid?

The Free Application for Federal Student Aid (FAFSA) is the form that’s required for domestic students to apply for federal financial aid. If you’re an international student, filling out a FAFSA can still be a good idea because some schools, scholarship programs, and student loans for international students, and require it.


Do you pay back financial aid?

It depends. If you borrowed education loans, you must pay them back based on your loan agreement. Other gift-based financial aid, like scholarships, do not need to be paid back.

Author: View all post by Jennifer Calonia

Submit a Comment

Your email address will not be published. Required fields are marked *

DISCLAIMER – Subject to credit approval, loans are made by Bank of Lake Mills or MPOWER Financing, PBC. Bank of Lake Mills does not have an ownership interest in MPOWER Financing. Neither MPOWER Financing nor Bank of Lake Mills is affiliated with the school you attended or are attending. Bank of Lake Mills is Member FDIC. None of the information contained in this website constitutes a recommendation, solicitation or offer by MPOWER Financing or its affiliates to buy or sell any securities or other financial instruments or other assets or provide any investment advice or service.

2022 © MPOWER Financing, Public Benefit Corporation NMLS ID #1233542. 1101 Connecticut Ave NW Suite 900, Washington, DC 20036