Finance Your MS in the USA: Guide to Unlocking Your Educational Dream!

Finance Your MS in the US: Guide to Unlocking Your Dream!

An education loan covers the cost of tuition, living costs, insurance, and other incidentals. Given the wide variety of choices available today, finding the best deal to finance your MS in the US is possible. In fact, taking an education loan is a smart move, as you don’t need to break into your savings while taking advantage of tax benefits.

Eligibility

Students pursuing full-time higher education, graduate or postgraduate studies, and professional education, irrespective of age, can borrow the required funds to finance their MS in the US. Most loan providers require that students show proof of admission to the graduate or postgraduate program. However, some private institutions and cooperative banks sanction a loan even before getting admission.

Tax Benefits of Financing Your Education

Tax Benefits of Financing Your Education

People with sufficient funds are also advised to take a loan to finance their education since they get tax deductions under Sec 80E of the Income Tax Act. There is no limit for Section 80E exemption up to which you can claim the deduction. All interest paid in a financial year is tax deductible, regardless of the sum. The interest component of the education loan can be claimed under Section 80E just as deductions under Section 80C and Section 80D are claimed before arriving at your total income to calculate the tax liability. However, it is important to note that you can claim a tax deduction only for the interest portion. You cannot claim a tax deduction for the principal part of the EMI.

You will be eligible to claim a deduction under section 80E only if you take the loan from any bank/financial institution or any approved charitable institution. Loans from friends or relatives for higher education do not qualify for this deduction.

Loan Amount and Repayment

Finance Your MS in the US: Loan Amount and Repayment

I-20 or Admission Letter mentions the total cost of education for one year. Students can get a loan for up to double the amount mentioned on the I-20. Depending on the loan provider, there are slight variations regarding the application process, documentation, interest rates, guarantees, etc. Students are not expected to pay any EMI for the first two years. (Some loan providers may demand interest during these two years.) Generally, loan repayments begin one year after the end of your course or six months after you secure your first job, whichever is earlier. Most lenders also allow for additional time in case the student is unable to finish the course on schedule. Loan repayments are spread over 10-15 years to ensure that you are able to comfortably finance your MS in the US and include options for early repayment.

Rate of Interest and Margin Money

Rate of Interest and Margin Money when Financing Your Education

Most Nationalized banks and financial institutions offer fixed or floating interest rates in the range of 9-12%. Girls generally get a 0.5% concession from banks.

There is also the all-important factor of “margin money”! What this means is that most lenders will not loan you the entire cost of education – they also expect you to pay part of it. In other words, if, for example, your education cost is Rs. 40 lakhs in all, and there is a margin of 10%, then the bank will lend you Rs. 36 lakhs, and you will have to put up the remaining Rs. 4 lakhs. The idea is to ensure the loan seeker can bring money in and demonstrate responsibility. However, not all lending institutions insist on margin money; for example, loans from HDFC CREDILA do not need a margin.

Guarantors & Collateral

Guarantors & Collateral

A guarantor is a third party (different from the applicant) who agrees to repay the loan if the borrower can’t. Besides this undertaking, lenders also request collateral in the form of fixed deposit receipts, property, or other security. They keep this collateral in their possession until you repay the loan. Banks or lenders do this to safeguard themselves against a bad debt. The lender may waive the guarantee if the borrower’s previous repayment track record or financial history is very sound.

If payments are defaulted on, i.e., not made on time, the loan contract has provisions for penalties/late payment fees. Besides, defaulters also risk being ‘redlisted’, which severely limits their future credit options. However, most bankers or institutions are receptive to negotiation and allow for extensions on payment tenure or reduction of EMIs in case of genuine difficulties.

So, look around and see your options! A good loan deal can be a big asset in helping you finance your dream of an American education.

As India’s leading Study Abroad Consultant, Dilip Oak’s Academy offers a comprehensive suite of services, including GRE, TOEFL, and IELTS coaching, as well as GRE Self Prep. Furthermore, our admission counseling services can guide you through the entire process from Shortlisting Universities to Visa Counseling. With our expertise, we have successfully sent 32,000 students to various prestigious American universities like MIT, Stanford, Cornell, and Carnegie Mellon. To enroll in our comprehensive overseas education consultancy services, book a free consultation or call us at 91-20-67444222.

Navigating Financial Aid: A Guide for Indian Students Pursuing Higher Education in the US

The dream of pursuing higher education in the esteemed universities of the United States often seems financially daunting. However, there’s a silver lining: a multitude of financial aid options are available to deserving students. For many Indian students, the costs have been significantly mitigated through the generous financial assistance programs offered by US universities.

Assistantships: A Pathway to Affordability

One of the primary avenues for financial assistance is through assistantship programs. Several universities award assistantships in the form of teaching and research assistantships to master’s and doctoral program students. These require awardees to perform certain services for a specified number of hours per week. The awards are usually for the current semester and may be extendable depending on the awarding requirements of the department and the funds available. Continuation also depends on the student’s maintaining a good academic record.

These include:

  • Teaching Assistantships (TA): Involving aiding faculty members in teaching (mostly elementary lab courses), conducting tutorial/problem-solving sessions or grading answer scripts. Depending on their competence and interest in the subject, teaching assistantships may also provide students opportunities to work outside their department in areas like Physics, Chemistry, and Mathematics. Many universities assess these through a test.
  • Research Assistantships (RA): Providing opportunities to work on university research projects under the guidance of faculty. The selection may involve an interview/written exam to test your aptitude, knowledge and skills.

Both teaching and research assistantships require students to work up to 20 hours a week and carry a stipend and tuition waiver depending on the extent of the award (the full 20 hours or less). Generally, even a 10-hour job substantially reduces tuition and compensates for living expenses. The student’s performance in the duties assigned is closely monitored. The student is also required to maintain his academic performance in the graduate program and show good progress in his research work.

Tuition Waivers: Easing Financial Load Based on Performance

Universities often offer tuition waivers based on academic performance. These waivers can be full or partial, covering semester fees or specific credit charges. Some universities even extend in-state tuition benefits to international students, substantially reducing overall costs.

Graduate School Fellowships: Recognizing Excellence

These are offered only to outstanding students. The student is nominated by their graduate program. Generally, the awards are given to students admitted to Ph.D. programs in the department and, as a rule, exempt students from any specific duties. The students are expected to perform full-time research and may occasionally be required to perform teaching duties for a semester as a part of their program.

On-Campus Employment: Balancing Work and Studies

International students on F-1 visas can engage in on-campus employment. These part-time roles, such as positions in cafeterias, libraries, or administrative offices, typically pay between $10 to $14 per hour, allowing a maximum of 20 hours per week.

Internships: Blending Academia with Practical Experience

After completing two semesters of full-time education, students can pursue internships related to their field of study, aligning with their academic training. These internships fall under Curricular Practical Training during the program, governed by US Citizenship and Immigration Service (USCIS) regulations.

Indian Government and Private Trust Scholarships: Seeking External Support

Researching and finding information about scholarships offered by the Indian Government and other trusts can be useful. The Government of India (GOI) offers scholarships for advanced education to SC and ST students, and the Social Welfare Departments of respective state governments administer these. GOI also has a scheme of supporting higher education in areas where India lacks facilities for such education.

Several private trusts, like Inlaks, Sakal India Foundation, J N Tata Trust, and K.C.Mahindra Scholarships, offer substantial amounts to students going to top-ranking universities. (There are also the Cambridge Trusts if you want to apply to Cambridge). However, the trust may have certain specific criteria that the applicant must meet. The announcements for these scholarships appear in leading newspapers.

Education Loans: Banking on Future Success

Banks in India provide education loans with competitive interest rates, offering financial assistance for the total cost of education aiding students in fulfilling their academic aspirations. The rate of interest varies between 9% to 13%. For more information, please read our dedicated blog post on education loans.

Conclusion: A Feasible Path Ahead

While the costs of education in American universities may seem prohibitive at first glance, a myriad of financial aid options exist for Indian students. From assistantships to scholarships and on-campus employment, these avenues help alleviate the financial burden, making the dream of studying in the US a tangible and achievable reality for many.

Remember, these opportunities are competitive and often require outstanding academic records or meeting specific criteria. Researching and understanding the various forms of financial aid can significantly bolster your chances of securing assistance for your academic journey in the United States.

As India’s leading Study Abroad Consultant, Dilip Oak’s Academy offers a comprehensive suite of services, including GRE, TOEFL, and IELTS coaching, as well as GRE Self Prep. Furthermore, our admission counseling services can guide you through the entire process from Shortlisting Universities to Visa Counseling. With our expertise, we have successfully sent 32,000 students to various prestigious American universities like MIT, Stanford, Cornell, and Carnegie Mellon. To enroll in our comprehensive overseas education consultancy services, book a free consultation or call us at 91-020-67444222.