Scholarships are generally better for international students as they don’t require repayment, while loans accumulate interest and must be repaid regardless of your post-graduation circumstances. Your optimal choice depends on your academic achievements, financial situation, and long-term career plans.
Understanding Scholarships: Free Money for Your Education
Scholarships are merit-based or need-based financial awards that don’t require repayment. They’re essentially free money provided by universities, private organisations, governments, and foundations to support your educational journey.
Most scholarships for international students are awarded based on academic excellence, leadership potential, community involvement, or specific talents. The Mastercard Foundation Scholarship, for example, covers tuition, accommodation, meals, and even provides a stipend for qualifying students from developing countries.
The key advantage: unlike loans, scholarships never need to be repaid, leaving you debt-free after graduation.
Understanding Student Loans: Borrowed Funds with Terms
What Are Student Loans?
Student loans are borrowed money that must be repaid with interest over time. For international students, these typically come from private lenders or sometimes from your home country’s government.
Key Features
Most international student loans require a cosigner who is a US/UK/Canadian citizen or permanent resident with good credit. Repayment terms generally range from 5-15 years, with interest rates varying from 3-14% depending on your cosigner’s creditworthiness.
Availability
Unlike scholarships which are competitive and limited, loans are more readily available to qualifying applicants. They can cover both tuition fees and living expenses, providing more comprehensive financial support.
Grants: The Often-Overlooked Third Option
Student grants are similar to scholarships in that they don’t require repayment, but they’re typically awarded based on financial need rather than merit. For international students, university-specific grants are often the most accessible option.
Where to Find Grants
- Cultural exchange programmes
- University financial aid offices
- International student services
- Non-profit organisations
Application Requirements
- Letter of acceptance
- Proof of financial need
- Academic transcripts
- Personal statement
While often smaller than full scholarships, grants can significantly reduce your educational expenses and don’t add to your debt burden.
What Is the Difference Between Loans, Scholarships, and Grants?
| Feature | Scholarships | Grants | Loans |
| Repayment | No | No | Yes |
| Eligibility | Merit-based | Need-based | Anyone (credit check may apply) |
| Funding Source | Private organizations, schools | Government, state programs | Federal or private lenders |
| Interest Charges | None | None | Yes |
Comparing Loan Options Across Countries
Take for instance…
USA
Private lenders like Prodigy Finance and MPOWER offer loans specifically for international students. Typically require a US cosigner, with interest rates from 7-13%. F-1 student loans are available after establishing US credit history.
Canada
Canadian financial institutions offer student lines of credit with more flexible repayment terms than traditional loans. Interest rates typically range from 3-6% with a Canadian cosigner. Some provinces have specific programmes for international students.
UK
International students can access private loans from UK banks with a UK resident guarantor. Future Finance specialises in international student loans with repayment terms up to 7 years after graduation.
Australia
Most Australian banks require temporary residents to have an Australian citizen as guarantor. Interest rates range from 4-8% with flexible repayment options beginning after course completion.
Top Scholarship Opportunities for International Students
Mastercard Foundation Scholars Program
Comprehensive scholarships covering tuition, accommodation, meals and stipends for students from Africa attending partner institutions. Requirements include academic excellence, leadership potential, and commitment to giving back to your community. Check out here for more scholarships that are similar to Mastercard foundation Scholars program (offering fully funded scholarships).
Fulbright Foreign Student Program
Prestigious scholarships for graduate students, young professionals and artists from abroad to study in the United States. Covers tuition, living expenses, health insurance and travel. Highly competitive with country-specific application processes.
University-Specific Merit Scholarships
Many universities offer substantial scholarships based on academic achievement. These range from partial tuition waivers to full funding packages. Application is often automatic when you apply for admission, but some require separate applications.
Loan Application Process for International Students
Find a Suitable Lender
Research private lenders that specialise in international student loans. Look for those that don’t require a US cosigner if possible, such as MPOWER Financing, Passage, or Prodigy Finance.
Gather Documentation
Prepare your university acceptance letter, visa documentation, passport, proof of address, and any proof of income or assets. If using a cosigner, they’ll need to provide credit history and income verification.
Submit Application
Complete the online application form, upload all required documents, and submit. Most lenders offer pre-approval decisions within 3-5 business days.
Review and Accept Terms
Carefully review the interest rates, repayment terms, and any fees before accepting. Most international student loans have deferment options while you’re studying and grace periods after graduation.
Strategic Approach in Making Your Decision
Research Extensively
Start by applying for all possible scholarships before considering loans. Search university websites, education ministries in your home country, and international organisations like the British Council or DAAD.
Calculate Total Costs
Don’t just consider tuition—factor in living expenses, travel, health insurance, and potential currency fluctuations. The full cost of your education is typically 30-50% higher than tuition alone.
Consider Hybrid Approach
The best strategy is often a combination: secure partial scholarships and grants first, then supplement with smaller loans as needed. This minimises debt while ensuring your education is fully funded.
Remember that your education is an investment in your future. While scholarships are ideal, reasonable loan amounts for high-value degrees can still provide positive returns through enhanced career opportunities and earning potential.
