Education Loan to Study in USA: The Complete Guide 2025

The United States is a top study-abroad destination for international students, offering a wide range of educational institutions across its 50 states. Out of the 4,500 higher education institutions in the country, approximately 1,700 provide master's degree programs. Indian students particularly favor the USA for pursuing their master's degrees, as evidenced by the significant enrollment numbers. In the 2021-22 academic year, while around 27,500 students enrolled in bachelor's programs, an impressive 102,000 students pursued master's degrees. However, it is crucial to note that studying in the USA can be expensive, with average tuition fees for international graduate students amounting to approximately USD 39,000. To finance their education, many students opt for abroad education loans, which not only cover tuition fees but also living and other expenses. Additionally, these loans serve as proof of funds for obtaining student visas to the USA. This blog will answer the question - ‘How to get loan in USA?

Cost for MS in the USA

Before knowing how to get student loan for MS in USA, it is important to know the cost of studying MS in the USA. Master's degree program fees in the USA generally range from USD 10,000 to USD 80,000 (INR 10 - 69 Lakhs) for a two-year duration. Higher-ranked private universities often charge slightly higher tuition fees and additional expenses. Refer to the table below for an estimated costs of MS in USA.

However, students generally spend USD 500 to USD 1,000 per month on living expenses, covering items such as food, accommodation, study materials, clothing, health insurance, recreational activities, and other necessities. However, living expenses can vary depending on the state, city, and individual lifestyle choices.

Types of Education Loans for MS in the USA

Student Loan for MS in USA can be broadly classified into two categories. Refer below to learn in detail about the types of education loan:

Secured Education Loan for MS in the USA:

So, secured loans for MS in US necessitate collateral, allowing for higher loan amounts compared to unsecured loans. Collateral can include movable or immovable assets such as Fixed Deposits, LIC Insurance, non-agricultural land, residential property, or commercial property. It is important to note that most public banks in India require collateral for education loans for studying abroad.

Furthermore, secured loans may not require a co-applicant. When exploring education loan options for studying MS in the USA, two recommended public sector banks are the State Bank of India (SBI) and the Union Bank of India (UBI). Here is a comparative analysis of these banks' education loan offerings for studying in the USA.

Read more about: Types of Collateral Security Acceptable for an Education Loan

Unsecured Education Loan for MS in USA:

If you lack collateral for an education loan to study MS in the USA, there are alternative options available like non-collateral loans through private banks, NBFCs, and international lenders. An unsecured education loan for MS in USA is a loan option that does not necessitate the borrower to pledge collateral as security. Private banks and NBFCs may require a co-applicant with minimum financial income and no liabilities, whereas international lenders offer loans without a co-applicant.

Opting for international lenders can be beneficial as they provide loans in USD, potentially saving on foreign exchange charges and other costs. However, it is important to note that international lenders typically have higher interest rates. Each lender offering unsecured education loans for MS in USA has its own advantages and disadvantages. To aid in your decision-making process, we have prepared a comparative chart of these lenders.

Expenses Covered by Education Loan for MS in USA

Below is the list of expenses that may be covered under the loan as per the lender:

Education Loan Eligibility for MS in USA

International students seeking an education loan for MS in USA must meet certain eligibility criteria. These include:

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  Obtaining confirmation of acceptance from a recognized American institution for a full-time master’s program.
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  Being at least 18 years old.
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  Demonstrating a strong academic track record.
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  Choosing a course of study with promising career prospects.
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  Providing collateral, if applying for a secured loan.

Required Documents for MS in the USA Education Loan

In addition to meeting the mentioned eligibility criteria, it is crucial for students to gather all the necessary documents before applying for an education loan to study in the USA. The document checklist can be extensive, but GyanDhan provides a personalized document checklist to streamline the submission process for you.

How to Apply Education Loan for Masters in USA?

To avoid delays and complications in the educational loan application process, it is strongly recommended that students initiate their application as soon as they receive their admission letter from the university. Here is a general outline of the steps involved in applying for an MS loan in the USA:

Assess Your Eligibility:

Begin the loan application process for a US university by assessing your eligibility for an abroad education loan using GyanDhan's platform.

Discussion with an Education Loan Counselor:

An education loan counselor will call you to discuss the possible education loan options. Post discussion, depending upon the type of lender from which the loan is to be availed, the counselor will suggest the subsequent steps.

Receive a Customized Document Checklist:

Based on the lender's specific requirements, you will receive a customized document checklist. This checklist will outline all the necessary documents and offer alternative options (if available) to simplify the document arrangement process for you. Depending on the lender's instructions, you will be requested to submit the documents either in hard copy (collected by a relationship officer) or soft copy (uploaded on the portal).

Submission of Documents:

Upon the submission of the documents, the lender reviews the application. During this process, the student and his/her parents may be asked to furnish additional information. If the bank finds the application to be viable, it will approve the loan requests. 

Accept the Loan Offer:

Once the loan is approved, the student has to accept the loan offer by providing signatures on the sanction/approval letter offered by the bank and pay the processing fees.

Repayment of Education Loan for MS in the USA

The time required to repay an education loan after completing an MS in the USA varies. If you are also stuck at, “How much time it takes to repay loan after MS in USA?” This is yet another question that prevails in the minds of Indian students. When acquiring an education loan for studying MS in the USA, it is crucial to consider the repayment terms. The repayment tenure and moratorium options are essential factors when selecting a lender. There are various repayment options available, including partial simple interest (PSI), simple interest (SI), and equated monthly installments (EMI). To help you make an informed decision, we have created a comparative guide that focuses on repayment as a key aspect of obtaining a loan for studying MS in the USA.

Government Schemes and Subsidized Loans for MS in US

To promote the objective of holistic development and propel economic growth, education loans are included under priority sector lending. Several schemes and subsidized programs are been offered by the Indian Government to support the students willing to pursue higher education abroad. This section will detail various financing options like education loan for MS in US, education loan for MS in USA without collateral, and many other schemes offered by the government.

Vidya Lakshmi Portal:

The Vidya Lakshmi Portal has been launched under the Pradhan Mantri Vidya Lakshmi Karyakram. The aim of this portal is to act as a single-window platform for students seeking education loans and scholarships. The portal helps students to access various loan schemes offered by multiple lenders. It allows students to compare various loan options available and students can also apply for loans with ease. As of August 15, 2024, 38 banks were registered on the portal, offering 137 loan schemes.

Dr. Ambedkar Central Sector Scheme:

The scheme is designed to provide interest subsidies on education loan to students hailing from Other Backward Classes (OBCs) and Economically Backward Classes (EBCs) to help fund their overseas studies. The students who qualify for the scheme get up to 100% interest subsidy during the moratorium period of the loan.

Gujarat Government Education Loan for Studying Abroad:

The students who wish to pursue their higher education from abroad get an education of up to INR 15 lakhs at a subsidized interest rate of 4% per annum by the Gujarat government. The aim of the scheme is to provide financial aid to students of economically weaker sections hailing from Gujarat, with a family income of less than INR 6 lakhs per year

Education Loan Scheme of the NBCFDC:

This scheme is designed to provide financial support to those coming from backward classes. The education loan scheme offered by the NBCFDC (National Backward Classes Finance and Development Corporation) covers professional, technical, and vocational courses. To become eligible for the scheme, students should not have a family income of more than INR 3 lakhs per annum. Students can avail of financial assistance of up to INR 20 lakhs at the interest rate of 4% per annum with a 0.5% concession for female students.

Central Sector Interest Subsidy (CSIS) Scheme:

This scheme has been crafted for students hailing from economically weaker sections and provides interest subsidies on education loans. Students should not have an annual family income of more than INR 4.5 lakhs.

Alternative Financing Options For MS in US

Students can explore various alternative financing options to cover the burden of their educational expenses in addition to education loan for MS in USA for Indian students. This section will detail about the alternative options to finance your education abroad or even in India.

Scholarships and Grants for MS Students in the USA:

Scholarships and grants are the financial support awarded to the students that do not require repayment, making higher education more accessible for the students. Scholarships are often merit-based or need-based an can be offered universities, private organizations or government body. 

Crowdfunding Platforms:

Crowdfunding involves raising small amounts of money from a large number of people, generally conducted via the internet, to fund educational expenses. This method has gained popularity as an alternative means to support education costs. 

Employer-Sponsored Education Programs:

Some employers offer educational assistance programs to their employees. This contribution can include tuition reimbursement, scholarships, or grants for further studies. These programs are designed to upskill their employees by enhancing their qualifications. This type of arrangement benefits both the employee and the organization.

When applying for an education loan to pursue MS in the USA, it is important to carefully evaluate and compare the offerings of different lenders. However, GyanDhan provides a convenient solution to simplify the process. By reaching out to us directly, you can benefit from our streamlined education loan assistance. Our education loan expert will assess your academic and financial background, and guide you through the available loan options. With our extensive network of partnerships with government banks, private banks, and NBFCs, we can help you find the most suitable loan for your needs. Best of all, our assistance is provided free of charge. So what are you waiting for, check your loan eligibility now!
 

Read more about:

• 
  Documents Required for Education Loan
• 
  Indian Government Education Loan Schemes to Study Abroad
• 
  Scholarships to study in USA for Indian students
• 
  Guide to Public Universities in the USA
• 
  All About SOP For MS in US
• 
  How to prepare for F1 student visa interview?
• 
  F1 visa interview questions

Frequently Asked Questions

How much loan can I get for masters in USA?

 

The total loan amount depends on the type of loan you are applying for. In secured loans, you can get up to INR 1.5 cr depending on the collateral value. In unsecured loans, you can get up to INR 75 Lakhs depending on the co-applicant's income, target university, target course, etc.

Is taking an education loan for MS in the US the right choice?

 

Education loans include several benefits such as tax benefits under section 80E, no principal amount payment during the study period, saving your current corpus, etc. It is always recommended to go for an education loan instead of using your savings as it can yield better interest if you invest it somewhere else smartly.

Can I take both a scholarship and an education loan at the same time?

 

Yes, you can use both a scholarship and an education loan to furnish your financial requirements for studying abroad.