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US: This student loan company offers scholarships to international students too

Who wouldn't be pleased to receive financial aid? Source: AFP/Bill Wechter

International students usually have a hard time accessing financial aid to study in US colleges and universities.

They’ll be glad to know that student loan company MPOWER Financing, a startup geared towards helping international students finance their higher education in the US, not only offers student loans but also scholarships.

It’s not much – only four US$5,000 awards per year – but every little bit goes a long way.

The MPOWER Global Citizenship Scholarship aims to be “widely accessible” to international and Deferred Action for Childhood Arrivals (DACA) students accepted or enrolled at an MPOWER partner university. These include several universities located in Canada, Caribbean and the United States, the full list of which can be found here.

Applicants for study at US partner colleges or universities must either be on an F-1 student visa status, permanent residence in the US or DACA recipient status. For Canadian partner colleges or universities, they must either be a Canadian study permit holder or a permanent resident there.

Applicants will have to submit a short essay response, which will be judged by an MPOWER committee on (1) grammar, vocabulary and clarity; (2) creativity; and (3) insightfulness and power of story. The application deadlines are April 15 and October 15 annually.

With college education in America so costly, even for domestic students who pay much lesser, many international students who have enrolled in the past have largely relied on the huge coffers of wealthy parents or state funds.

Unlike in-state students who have a wealth of financial aid – reportedly more than US$2.9 billion in free college money goes unclaimed by students in the US each and every year – less privileged applicants from abroad do not have this same access. For them, scholarships like MPOWER’s add to the very limited list of financing options available to them.

Foreigners aren’t eligible for federal loans in the US and without a local relative or someone else as a co-signers, most lenders won’t approve their student loan applications. MPOWER, along with Prodigy Finance and Stilt, are startups that are approving international student applications for student loans based on their merit, instead of credit history.

This explains why its interest rates are higher than regular loans.

To offset the risks of granting unsecured loans to such clients, international students have to pay between 7.99 to 13.99 percent interest.

According to Forbes, this is “sharply above” the rates on “direct” and “plus” loans from the US government, which are between 6 and 7 percent, though comparable to private lenders’ rates charged on graduate students.

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