Paying for higher education in the United States is not a one-size-fits-all process, especially if you come from a different country. Many international students get accepted into competitive programs in the US, but remain ineligible for traditional financing. For these students, there are very few reputable private funding options available.
Shorelight Marketplace’s new offering with MPower Financing helps new and currently enrolled undergraduate and graduate students reach their educational goals, even when they’re beyond the scope of traditional financing.
We spoke to MPower to learn more about their private loan offerings and which types of students qualify. Read on to learn more about MPower financing programs available through the Shorelight Marketplace, which provides international students with resources and opportunities to get more from their study abroad journey in the US.
How Do International Students Pay for University?
Many articles make the process of financing an education in the USA seem easier than it is. For example, Indian students may be directed to apply for an education loan from a bank, but are not told about the collateral or wealth requirements for securing a loan.
Students are also often directed to pursue financial aid programs for international students in the US as a viable funding source. This is excellent advice, but domestic students receive most of the financial aid funding at US institutions, leaving a small portion for a highly competitive pool of 1.1 million international applicants.
Most students pay for their international education with scholarships, bank and private loans, on-campus employment, and personal savings. But some students have criteria — or restrictions — that rule out one or several of these options. Others have education loans and scholarships, but still lack the funding they need to pay their tuition.
“We want to make socioeconomic mobility borderless,” said Harshit Sanghi, partner success lead for MPower. “You find talent in every part of the globe, so why doesn’t every high-potential student have access to financing?”
In 2023, India sent more than 330,000 students to study in the United States — the most from any country and a 23% increase from 2022. In addition to scholarships and Curricular Practical Training (CPT) roles like assistantships and fellowships, there are few opportunities for financial aid beyond personal and family support.
How MPower Financing Is Different
MPower is based in India and Washington, DC and services more than 190 countries. The private loan providers support more than 400 US- and Canada-based universities, including several Shorelight universities. It’s worth noting that MPower is a certified B Corp business. That means that, while for-profit, MPower meets the standards required to be considered a social-benefit service.
“In the traditional credit system, it’s really based on how rich your parents are or where they are from. We’re saying that none of this matters. What matters is really your future and your decisions,” said Manu Smadj, MPower CEO and cofounder. “If you’re on track to become the next nurse or next engineer or next Nobel Prize winner, we want to be able to recognize that and really finance your education. We’re focused on the underserved, the people [who] don’t have a credit record, but have a bright future ahead of them.”
There are several ways MPower loans are different from other loans available to international students. Let’s review.
MPower Loans Do Not Require Collateral or a Cosigner
Most education loans in India require collateral support, meaning you need to have property of equal or greater value to support your loan, should you not be able to pay. Most loans in the United States that are available to international students require a cosigner based in the US. A cosigner is similar to collateral support in that it gives recourse to the banks and institutions that issue student loans.
“We offer no collateral and no cosigner loans to students; our loans are based on the student’s future potential,” said Sanghi, who notes that not all US- and Canda-based universities qualify for MPower loans. “For instance, we look at how much money students can make post-graduation or after their program in the states or Canada.”
Continuing with our focus on Indian students, if you do not have a wealthy relative in the United States or own real estate that banks consider collateral, then MPower is one of the few available funding sources. The Bank of India Star Education Loan — Studies Abroad offers an option that doesn’t require collateral up to Rs.7.50 Lakhs, but that only covers between 10% and 25% of the average estimated costs. With MPower, students can finance more than 85 Lakhs for up to the last two years of their education.
MPower Loans Are Approved in Days
For students who have not secured funding but have been accepted to a program in the United States, it can feel like time is running out. Obtaining a secured loan in India requires time to confirm the value of the collateral. Several online sources show that it takes at least a month to process a secured bank loan. Others say it will take at least a month to start processing the loan.
“The private lenders in India require a lot of documentation — 20 odd documents and a lot of follow-up calls and meetings,” said Sanghi. “And then the bankers take seven or eight days to complete the application.”
Based on all the available metrics online, MPower approval and processing times are much shorter than traditional loan options, making them critical to students with programs starting in less time than a bank or conventional loan source can guarantee.
“We are a tech company, and we believe everything [needs] to be done fast. Students spend around 15 to 20 minutes on our application, and as soon as they finish, they get a conditional offer from MPower,” said Sanghi. “Then, we are very quick with our decisions. We get back to our students in two or three working days.”
For students studying STEM disciplines, MPower is releasing a new app that will supply students with offers in less than 10 minutes. Sanghi noted that this new app experience will be available soon to students.
MPower Provides Scholarships and Continued Support
MPower is committed to supporting students who study in the US and Canada with scholarships, scholarship advice, assistance in getting an internship, and more. According to Sanghi, MPower only invests in high-potential students, and it’s in the company’s best interest to see each student succeed.
“When it comes to student support, we go all in,” said Sanghi. “We help them find jobs and internships and help them apply for H-1B visas. We only approve loans for high-potential students because there is a higher probability that they’ll make the repayments. As a result, our default rates are very low.”
MPower loans can cover all kinds of international student expenses, from tuition to meals and books. They are especially appropriate for students who plan on staying in the US and working after graduation. Since they originate in the US, MPower loans also help students establish credit scores that will allow them to open US bank accounts, find housing, and more.
“We help students build their credit scores in the US, making it easier to live and work there,” said Sanghi. “A person studying under an F-1 visa for five years will probably want to get their H-1B and stay in the states. They will have a life by then. And after a year of paying their MPower loan on time, their credit score will be prime, which will help them achieve their goals.”
What Do I Need to Know about MPower?
MPower loans support students with up to $100,000 for one or two years, but you have to be within two years of graduating from your program. That means first- and second-year undergraduate students in four-year programs are not eligible. Programs for English proficiency or associate degrees are also not supported.
“Our model is based on data from the last 15 to 20 years, where we have seen students at a particular school and program who are likely to earn this much money,” said Sanghi. “So, we do debt-to-income (DTI) calculations in our loan approval model, and if DTI is okay to go ahead, then we approve the loans for the students.”
As Sanghi and Smadj noted, MPower loans are based on a student’s future potential. Not every university in the United States and Canada produces the results that qualify students for an MPower loan. Similarly, depending on your financial situation and course of study, you may find different loan options that are more appropriate to your situation.
Is an MPower Loan Right for Me?
MPower interest rates currently start at 9.99 % — not that different from high-value, collateral-secured education loans available from banks in India. The Bank of India Study Abroad loan charges the RBLR rate plus 2.60%, which is a rate of 11.95%. However, this represents just one market option. Further, loans secured by a US-based cosigner, if a student has one available, may carry significantly lower interest rates.
It’s also essential to consider plans after graduation. Students who return to their home countries may find themselves responsible for US-sized debts at local pay rates. Local salaries for starting positions could be substantially lower in one’s home country than they would be in the US and, therefore, much more challenging to pay off. This becomes especially true if your area of study is not in demand.
Remember, too, that exchange rates factor into repayment, and rates are not consistently favorable compared to the US dollar. It’s important to do your homework and to start the process early: know your options and education loan interest rates before you make a decision.
MPower loans are great options for students who:
Are motivated and have good academic profiles
Have two or fewer years of US-based study left
Need $100,000 USD or less
Attend programs at competitive universities with high future employment rates
Are under time constraints to secure a loan
Need gap funding to cover their education experience
Do not have the required collateral to support a traditional loan
Do not have a cosigner to help them in the United States
MPower Creates Educational Opportunities
Ultimately, MPower provides many students around the world with loan opportunities to study in the United States that are otherwise hard to find or access. If you fit into one of the categories above and are from one of the 190 countries MPower represents, fill out an application to see what your options are.
“Many students would be successful, but can’t study in the US because they don’t have the funds, their parents are not supporting them, or they do not have a cosigner in the US. We offer a product to support these global high-potential students,” said Sanghi. “We are quick, robust, and easy compared to other public lenders and private banks. With MPower — it’s as easy as signing up on Facebook.”
Learn more about MPower at Shorelight Marketplace >
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