International students wanting to study in the United States have a unique challenge compared to their American counterparts: They have to prove they have the funds to attend college before starting the school year. The fear is that if international students don't have the money to complete their education, says Peggy Blumenthal, the Institute of International Education's (IIE) senior counselor, they won't be able to afford to complete their degree and accomplish their goals.
Since the vast majority of international undergraduate students, according to Blumenthal, pay for their education out of personal and family funds, it's important for families considering a U.S. education to estimate costs and start saving for college as soon as possible.
Here are three tips for estimating college costs and beginning the process of saving for college:
1. Estimate costs to attend U.S. schools: EducationUSA, the U.S. Department of State-supported advising network of advising centers in 170 countries, offers free help to international students to find the school that's the best fit, academically and financially.
Students wishing to study in the United States should start by going to the EducationUSA website to find contact information for their local advising center. During their appointment they can get help estimating costs to attend U.S. schools and get information on scholarships and other financial assistance.
[See sources of scholarships for international students.]
Students can also find a variety of resources online. They can go directly to university websites to find international student information. CollegeWeekLive offers free online college fairs, collegeboard.org offers information on college pricing, and students can come to usnews.com to read articles on paying for college.
2. Coordinate savings efforts among family members: Students and parents should have a family meeting to discuss what they can afford to save as soon as possible, Blumenthal says. It's important that other relatives that may want to contribute also attend. In India and China, it's not uncommon for grandparents and parents to pool resources, Blumenthal says.
No matter how much families can afford to save, says Blumenthal, the most important action is setting a regularly scheduled savings amount as early as possible. For example, $100 per month saved for 10 years adds up to $12,000, not counting any interest earned. Although exact fees vary by country, saving less than $21 per month for one year could pay for TOEFL test fees, a common test for international students seeking admission to U.S. schools.
[Get tips on studying for the TOEFL.]
3. Check on availability of tax-advantaged accounts: If a savings or investments account offers a tax benefit such as tax-free earnings on college savings, experts say, that's more money for students to use toward their education.
For instance, the U.K. offers Junior ISAs, accounts that parents can open for kids under 16. Junior ISAs can be cash Junior ISAs or contain stocks and shares. Any growth from these savings accounts or investments isn't taxed. According to a spokesperson from Her Majesty's Treasury, the deposit limit is up to £3,600 British pounds (approximately $5,600 as calculated on Aug. 1) per tax year. The funds can be withdrawn tax free for anything, including studying in the United States, starting when the child is 18. All parents are eligible, regardless of income, says Mark Hoban, financial secretary to the Treasury.
Canada's tax-advantaged accounts, known as Registered Education Savings Plans, are specifically for education and can be used at approved U.S. universities. Canadians wanting to find out if a U.S. school qualifies for tax-free distributions can call the Canada Revenue Agency at 800-959-2221. If you don't live in the U.K. or Canada, IIE's Blumenthal suggests asking your EducationUSA adviser if a special savings account option exists in your country.
[Read what students should know about studying abroad.]
Reyna Gobel, frequently quoted as an expert on student loans and college costs, is the author of "Graduation Debt: How To Manage Student Loans And Live Your Life" and "How Smart Students Pay for School: The Best Way to Save for College, Get the Right Loans, and Repay Debt." She has appeared on PBS's Nightly Business Report and speaks regularly at CollegeWeekLive.
Corrected on : Corrected 8/8/12: A previous version of this article incorrectly identified the College Board's website.