There are many exciting things about applying to study abroad, but your finances are always serious. Arranging how you will pay for your education is critical, and it can be confusing. During your research, you will hear about many different funding options, and terms that may be unfamiliar. Most commonly, you will encounter two of them: student loans and scholarships. If you want to know more about these and how they differ, we can explain.
Loans
What is a student loan?
A student loan is a financial arrangement under which you borrow an amount of money to cover the cost of university. You are usually expected to pay this back once your studies are completed, over an agreed period of time. Interest can be charged on the borrowed amount, which would mean that you pay back slightly more than you were given. Loans are one of the most common methods used by students to pay for university.
Where can you get a student loan?
In many top study destinations, student loans are available from government bodies. However, these are very rarely open to international students. As such, if you are looking to get a loan, you will most likely to have to go through a bank or private company.
If you do this, you must make completely sure that the institution you choose is trustworthy and reliable. Research them thoroughly to make sure they have a good reputation. Then, make sure that you meet the requirements they have for taking a loan, and that you expect to be able to meet any that follow.
When do you repay a student loan?
Ultimately, this will depend on the terms and conditions of your loan. It is important to understand these when applying for it, and when signing any related documents.
In most cases, you will not have to pay anything until your course has finished. Often, there is even a grace period, allowing you to start earning before any money is due.
It is very rare for a loan to require payments during your studies. However, where this is a possibility, it should be made clear when you take out the loan. Always make sure that you are clear on such details.
How often payments are required can also vary, but they should be part of an agreed schedule, in order for you to plan for them. As with other types of loan, you will also have the option to pay everything off more quickly than required (thus avoiding additional interest). Of course, most people do not do this – under the terms of some agreements, your loan may even be cancelled after a certain amount of time, if it is still to be paid off.
For a closer look at the technicalities, read our full guide to understanding student loans.
Why get a student loan?
A student loan gives you certainty that your education will be paid for, and that your contribution to it will only be needed later. Hopefully, this will give you more time and energy to put towards your studies and recreation.
While your finances may still need close attention even with a loan – it will most often be intended for academic purposes, and not general living costs – it can be a significant help. Tuition fees can be expensive, which is why this is one of the most popular ways to pay for them.
Want to know more about the price of international education? Read our guide to the cost of studying abroad.
Scholarships
What is a scholarship?
A scholarship is a form of financial support for students that does not require repayment. It may be awarded by a university or a third party, such as a business or charity.
The amount of money on offer can vary. Some scholarships are only intended as small contributions to a student's academic costs, while others can pay for the complete tuition fees of their course. However, it is important to remember that the latter are rare.
Often, scholarships have a set of application requirements or qualifying criteria. For the biggest ones, these can be tough. You might have to show a certain level of academic ability, and write a personal statement to explain your motivations for study. Where this is the case, your application will be assessed by a panel of judges, and competition may be strong.
If this sounds intimidating, don't worry. Not all scholarships are so hard to obtain. Some are offered on account of other factors – such as your nationality or study subject – and may be given to you automatically when you enrol.
Who offers scholarships?
A number of different organisations offer scholarships. These can include:
- Universities
- Businesses
- Charities
- Foundations
- Governments
It is most common to receive a scholarship from your university, but it is important to remember that they are not the only ones who can provide them. When looking for options, extend your search far and wide. The most substantial scholarships often come from governments in your study destination. For example, in the UK, you could explore the highly regarded Chevening Scholarships.
Who is offered a scholarship?
Scholarships are given to all kinds of students for all kinds of reasons. They may be a reward for academic achievement, support for those with most financial need, or simply a sum given to all students at an institution.
Whatever the basis, the goal is to take financial pressure off students. With a scholarship, you can put money towards your education without the stress of needing to repay it.
What are the other benefits to getting a scholarship?
Apart from the opportunity to attend university with increased financial freedom, a scholarship can also give you something impressive to put on your CV. If you have received it as a reward for your personal achievement, employers will want to know.
In addition, some scholarships also come with non-financial support. This may come in the form of invitations to special events, additional academic help, or membership of a scholarship network. This is especially common with major, government-funded scholarships such as the Australia Awards.
Can you apply for a student loan and a scholarship?
Yes – it doesn't have to be one or the other. The best approach to paying for your education is often to seek a combination of both a student loan and scholarships. Doing so is a great way of bringing the cost down, and particularly if it means requiring a smaller loan.
It is a very good idea to research the scholarships that may be available to you in detail before making any decisions about your funding. In theory, there is no limit to the amount that you could receive, so you will want to be aware of everything that is on offer. To get started, you can browse our scholarships page to see what is provided by institutions around the world.
For some more inspiration, you might also want to explore our lists of the top scholarships for international students in the UK, Canada and Australia. If you still want to consider more ways of paying for your study abroad, try our guide to student financial aid.
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