Financing your U.S. Education: An Investment in Yourself!

How much would it cost to study in the U.S.? This is probably the first question that most Indian students ask themselves, when they think about going to the U.S. for higher studies. While the cost of an American education is high and can add up to tens of thousands of dollars, it is an investment that will benefit you for the rest of your life. So don’t let this issue ruin the exciting plans you may have made. With a little planning, you will come out ahead. Start this planning by making an accurate estimate of the overall cost of your study in the U.S. and create an accurate budget. There will be many components to your budget that need to be taken into account. Tuition. Fees. Living Expenes. Travelling expenses. Miscellaneous.

Note that many U.S. colleges and universities require that international students pay for their first semester’s tuition in one installment. This could run into a few lakh of Indian rupees. In order to pay this sizable amount, you and your family will likely need to start planning well in advance. Despite this, do not let the cost of an education in the U.S. scare you off! If you are feeling overwhelmed by the cost, consider what an education in the U.S. will mean to your future. Education is one of the best investments you can make—an investment in yourself! A U.S. education and proficiency in English paves the way to more secure and higher paying jobs around the world and in the U.S. itself. In the end, your U.S. education will pay for itself many times over.

To finance your U.S. education, you will have to rely on financial aid packages, which could include grants, scholarships, loans and work/study options. Make time to research all the funding opportunities available to you.  

Calculating the costs

When considering studying in the United States, you must plan for the total cost of education for the entire period of your studies. The cost of studies varies considerably from school to school, as does the cost of living varies from one location to another. Keep in mind that in recent years, many schools’ tuition fees increase by around 5% annually, so your final year of study will most likely be more expensive than your first year.

Preliminary Costs

Entrance Exams: $500
College or university entrance exams can cost up to $500, plus the additional cost of travel to the test site.

Application Fees: $250-$600
Application fees to cover administration and processing range from $40 to $80 dollars per application. Most applicants apply to five to eight schools.

Living Cost for International Students in United States of America

In most cases the cost of tuition and fees accounts for nearly 70% of the total cost of studying in U.S. It varies from $10000 to $30000 per year. The cost of living in U.S. depends on location. For example States like Washington, California and area around New York are expensive more expensive than others. In general for students from India,  the cost of living may vary from $4000 to $9000 per year.

It is assumed that students will live in shared Apartments, live out of Campus and have less Telephone bills and other expenses are at bay. Most of (nearly) all expenses can be met while working on campus Jobs. The hourly pay for on- campus jobs varies from $6 to $10 per hour. Foreign Students can work for 20 hrs per week and 40 hrs per week during summer. Students may be allowed to work out of campus (Internship) after nine months of their arrival at the university.

Students not receiving any aid must come prepared for tuition fees and living cost for initial 2-3 months. Also note that some universities may have a shortage of part time jobs. Its better to contact current students via email for latest information on this front. In many universities the students can pay the fees of their current semester in the next semester and sometimes even after graduation. 

So students planning to go to the universities of these states must either have Scholarships or adequate Funds. To give you an idea of the cost of study in the U.S., below are some general estimates of the cost of tuition and room & board for an international student in an undergraduate program. Keep in mind that costs vary considerably, depending on which city, state, and school you choose (for example, living costs in a large city such as New York would likely be higher than in a small town in the Midwest.)

The first task you should do is to sit down with a pen, paper and a calculator to figure out the rough estimate of your yearly expenses while studying in the US. The yearly costs given below are rough estimates and will help you in arriving at that figure. Costs such as tuition and fees will vary between different schools. Costs such as travel and room and board will vary between different cities in the US.

Tuition

Tuition is the cost of instruction, while fees are charged
for services such as the library, student activities, or the
health center. International graduate students are
required to pay both tuition and fees, unless covered by
financial assistance. Some universities also charge international students mandatory health insurance fees. Tuition will be the largest component of your education cost. It will vary widely between different schools, so it is best for you to refer to the schools where you are planning to apply to get a realistic amount. As a very rough guideline, the cost for tuition can range from $7,000 to $20,000 per year. Public schools will typically charge lower tuition than private schools, and community colleges usually have the lowest tuition costs of all public schools.

Since tuition and fees vary between institutions and rise an average of 5 percent each year, it is best to consult current university catalogs and Web sites for the latest figures. Be sure to confirm current costs with the institution at the time you apply.

Living Costs
Living costs vary widely and depend on individual
lifestyles. If you are bringing family members with you to
the United States, this will, of course, increase your
monthly expenses.Living expenses are highest in the large cities, in California, and in the Northeast. Costs can be much lower in he South, the Midwest, and other areas. University catalogs and Web sites are good sources of information on
current living costs. Within the total living costs they
quote, you will usually find an approximate breakdown of
costs for items such as room, board, books, medical insurance, and personal expenses. 

Room and board

This is normally the second largest component of your education cost. The cost for room and board can also vary widely between schools, so you should check with the schools where you are planning to apply to get the right estimate. A rough guideline is between $3,000 and $5,000. Generally living off-campus works out to be cheaper than living in university apartments and residence halls. If you are considering living off campus then you may have to pay the little more initially towards the cost of furnishing that apartment, paying your monthly utilities (such as electricity), and the cost of transportation to and from school. But in the long run the most practical and economical choice for a first year international student is often to live off campus with a group of roommates. You should also note that university residence halls will often close during the summer. If you will not be returning to your home country during that time, you will have to find alternate housing in that case.

Fees

In addition to tuition, most colleges and universities will also charge fees, such as student activity fees. These help to support student clubs and organizations on campus. They are usually relatively small, only a few hundred dollars per year.

Books and supplies

Students must pay for all their textbooks, as well as supplies such as notebooks, paper, pens, etc. You can sometimes lower this cost by buying used books from the school’s bookstore. A good estimate for this cost is between $500 and $1,500.

Medical insurance

Because the cost of healthcare in the US is very high, many schools require international students to purchase medical insurance. It is a very good idea to buy insurance even if your school does not require it to protect yourself from extremely high medical bills should you become ill or have an accident. A comprehensive insurance policy (which covers doctor’s visits, medication, hospitalisation, and surgery) will cost between $1000 and $1,500 for one person.

Travel

You should calculate how much it will cost you to travel between your school and your home country. You will need to determine how many times during the length of your education you will go home and multiply that by the cost of airplane fare between the two locations.

Personal expenses

These expenses include clothing, entertainment, and telephone bills. This will vary depending on where you will live and on your personal lifestyle; therefore, it is difficult to provide an estimate.

Calculating the funds available

Now that you have arrived at a rough estimate of yearly expenses, you may start figuring out where that money will come from and at what cost. You should ideally try to  start your financial planning at least 12 months before you intend to study in the United States and explore all the avenues for funding- family funds, personal savings, scholarships, grants, educational loans, company sponsorship etc.

Assessing Personal Funds

Consult your parents and other family sponsors to find out how much money they can commit each year to your education. Try to raise as much as you can from family sources.

Scholarships/Fellowships                                            

Each year universities across the US award a small number of scholarships and fellowships to exceptionally qualified students from other countries. These strictly "merit" based awards carry full tuition waiver and a stipend good enough to take care of all living expenses. But since these awards are limited in number, the competition is intense, and very few Indian students manage to get these coveted awards. Therefore this option works out for only the most talented students from the country.

Teaching/Research Assistantship                               

A teaching or research assistantship is by far the most common way the international students receive financial aid from the US universities. These awards carry a full/partial tuition waiver and a stipend, in return for which they have to perform research/teaching/administrative duties under the professor/manager who hires them. In most cases students spend 20 hours per week in performing these duties. The preferred option should always be to go for Research assistantship, as the research work you do will be directly related to your field of study and will in turn help you in finding a job when you graduate with the degree. Teaching assistantships involve tasks within a department such as marking assignments, teaching sections of classes, helping students, etc. In most cases, consideration is given to academic achievements, ability, commitment and motivation, while awarding these assistantships.

Loans/Grants/scholarships from Trusts in India       

Many private trusts in India offer scholarships to students going abroad for higher studies. Click here for a listing.

Student Loans from Banks in India: Click here

Student loans from Banks/ Institutions in the US            In limited instances, you may be able to negotiate a loan to fund part of your educational costs from Banks/Lending agencies in the US. You must usually have a U.S. citizen co-signer to act as a guarantor for any loans from U.S. loan programs, and in most cases you must already be enrolled in a U.S. university before you apply. Before taking a loan, make certain you know how you are going to repay it, and how a loan will affect your plans for graduate or other further study and for returning home.

Campus Employment

Current immigration regulations permit international students to work only part-time — up to 20 hours per week — and only on campus during their first year of study. By working 10 to 15 hours a week, you could earn enough to pay for incidentals such as books, clothing, and personal expenses, but your campus job cannot pay your major expenses, such as tuition or room and board. This income also cannot be used as a source of income for any official financial statements. Campus jobs may include working at the university's cafeteria, bookstore, library, or health club, or within the university's administrative offices.

After the first year, you can also apply for employment as a resident assistant (RA) in a university dormitory. RAs serve as the first point of contact for students needing assistance or who have queries regarding dorm life. In return, RAs receive free accommodation and sometimes a small salary and/or meal plan.

Under current regulations, after your first year of study, you may apply to the Immigration and Naturalization Service (INS) for permission to work off campus for up to 20 hours a week. You should note, however, that there is no guarantee that this request will be granted. If you are married and are in the United States on an F-1 student visa (see chapter 11), your spouse does not have permission to work. However, if you are in the United States on a J-1 student visa, your spouse is allowed to request a temporary work permit.

Reducing Educational Costs
When planning your finances, consider these ways to reduce your costs:

Best Buys: Look for the colleges that offer you the highest quality education at the lowest cost.

Accelerated Programs: Completing a two-year master's degree in one-and-a-half years saves thousands of dollars. Students can accelerate their programs by:

• earning transfer credit or advanced standing for college-level studies completed in the home country (for example through A-levels, International
  Baccalaureate, advanced placement exams, or courses taken at local accredited post secondary institutions in your country, if accepted by the U.S. institution);
• taking courses at a nearby community college if tuition is lower and credits are transferable;
• attending classes during the summer if they are available;
• taking one additional course each semester.
• Tuition Waivers: Based on your first-year grades, some colleges award partial tuition waivers. A superior academic record could save you thousands of dollars.

Living Expenses: Becoming a resident assistant in a dormitory could save thousands of dollars in living costs. Working in the dining hall offers a modest salary plus "all you can eat" meals. Living off campus with a relative or friend saves money if suitable accommodation is available and public transport is efficient.

The Bottom line!

If you are not able to get any funding from any source in spite of your best efforts, do not loose heart! You only need to find enough funds to take care of your tuition for the first semester. Indian students generally do not find it hard to find funding once they reach the U.S., and finish their first semester. Usually during thier first few months at the university most of them manage to convince some professor to hire them as assistants. The assistantship position comes with a full-tuition waiver and a stipend, which in most cases is sufficient to take care of the living expenses.

Based on this logic, most students need to arrange anywhere between US$8000-10000. This is all they need to carry when they leave India. And Indian banks can readily give you this much amount as a long-term and low-interest student loan, which you can easlity pay back once you find a job in the U.S. after your studies.