If you’ve received an admit from your dream university in the US, you should now begin your financial preparation.
In the sense, it is high time already – some aspects of financial planning ideally begin around the time you start your applications, but after you receive an admit, you absolutely cannot afford to delay this part any further.
The reasons are two-fold:
First, you need to be able to prove to the University and the Consulate that you have the financial capability to fund your education (without having to be an immigrant)
And secondly, once your admit is confirmed and visa is stamped, you will need to actually make your fee payments and fly to pursue your degree.
In this blog, we cover different aspects of financial planning that are required for you to pursue graduate education in the US.
And we begin by talking about the i-20 application.
Applying for the I-20
If you’re wondering what exactly is the I-20, we first answer it below:
What is the I-20?
The Form I-20, also known as the ‘Certificate of Eligibility for Nonimmigrant Student Status’, is a crucial document provided by US schools certified by the Student and Exchange Visitor Program (SEVP). It is essentially your ticket as an international student approved to join a full-time academic or language program in the US. Serving as your passport to the F-1 student visa process, it details the specifics of your chosen program of study and associated expenses.
When applying for an F-1 student visa, presenting the Form I-20 is a must. This document confirms your acceptance by an SEVP-certified school and provides key program details such as start date, duration, and costs. Additionally, it’s essential for various immigration procedures like accessing benefits, maintaining visa status, or transferring to another SEVP-certified institution.
How to apply for I-20?
In order to obtain the I-20, you need to showcase to the university that you have the necessary provisions to fund one year of your education abroad.
Yes, the university (in 98% of the cases) wants to see how you plan to fund the first year of your degree program (even if your program duration may be 18 months or 2 years).
So how do you know how much amount you need to show to the university? Well, the university will let you know.
Essentially once you receive an admit, the university will send you an email that (along with other things) will mention:
- Tuition fees for one year
- Living expenses for one year
Thus, the total funds that you need to show to the university is an addition of the above two figures. (At Collegepond, we call this as ‘I-20 Amount’ for the same of convenience.)
And how should you show these funds?
You can show them through a combination of:
- Funds in the Savings Bank Account
- Term Deposits or Fixed Deposits
- Education Loan
- Scholarships
For nearly every university, the above four sources of finance are acceptable. Very few universities refuse to consider education loan as a source of funds for issuing the I-20 (remember, VERY FEW).
Some universities may allow you to show stocks and mutual fund statements as well (such universities accept 50% of the current value of stocks or mutual fund investments).
However, barring these exceptions, for the most part, the four sources of funds mentioned above are valid for obtaining I-20s for the large majority of universities.
Typically, you can show funds in your name and your parents’ names (either or both). If a student is unable to showcase adequate funds in their and their parents’ names, we intervene and investigate the student’s case specifically to plan what has to be done.
What financial documentation do I need for I-20?
For showing savings account balance and fixed deposits, you can obtain a bank letter which states the amount of funds you have as on date.
For education loan, you can submit the fully sanctioned loan letter (Conditional loan sanction letters are not acceptable)
If you have received a scholarship, you can show the same through submitting the scholarship grant letter.
Once you receive the I-20, it will look like this:
- Personal Details: This part of the I-20 covers all the basics about the student, like their name, birthdate, nationality, and that special SEVIS ID number that sets them apart.
- Program Info: Here, you’ll find the lowdown on the academic or language program the student’s diving into – things like when it starts, when it wraps up, and how long it’s expected to run.
- Financial Preparedness: The I-20 gives a broad picture on what it’s going to cost to complete your studies, breaking down everything from tuition to living expenses. Plus, it flags if the student’s got the cash to cover it all.
- School Info: This section gives the information on the school itself – its name, location, and its special code in the SEVIS system.
- SEVIS Scoop: Here’s where you’ll find the student’s digital footprint in the SEVIS database – details like when their program kicks off, what level they’re at, and if there have been any changes along the way.
- Student Sign-Off: The student needs to go through and sign the Form I-20, showing they get what’s expected of them in the program, financially and immigration-wise, while they’re studying in the US.
Once you receive your I-20, you will have to initiate your F1 Visa application, and if you wish to know how to go about the same, you can read our thorough guide on how to apply for the F1 Visa.
For the Visa, you need to prepare financial documentation that meets certain different conditions than the I-20, and we discuss all of it in the section below.
How to Prepare Finances for F1 Visa application?
The first step is to determine:
How much funds you need to show for the F1 Visa
Remember your I-20 amount? That was a fixed amount that was stated by the University. So, we know exactly what is required to show to the University to obtain the I-20.
However, when we are talking about the amount of funds that we need to show during the F1 Visa interview, it is difficult to pinpoint a number.
How much amount you show will depend on the I-20 amount and the duration of your program. And this is something that we help students determine on a case-by-case basis.
Now the next question on your mind would be –
How do I show the above amount for F1 Visa?
You can show the above amount through a combination of liquid assets which include:
- Savings Bank Account
- Fixed Deposits or Term Deposits
- Scholarships
- Education Loan
- Mutual Funds
- Stocks
- Other liquid assets (may include Insurance (surrender value is considered), Pension Funds (only the withdrawable amount)
You need not show all the above, however, it is advisable that you show a certain percentage of the total amount through Savings Account and Fixed Deposits.
Also, how much to show depends on the parents income as well. If the income is very high, then the VO may not be interested in liquidity. But if the parents have retired with no net inflows happening, then we need to show much more money indicating that the parents will still have a cozy retired lifestyle even after paying for the education and misc expenses.
Further, we do not recommend last-minute high-value transactions (what is a high-value transaction depends on your parents’ income. For example, if income is ₹ 12 lakhs per annum, a transaction of ₹ 2 lakhs will be considered high value, whereas if the income is ₹ 12 crores, then even a transaction of ₹ 20 lakhs won’t raise an eyebrow)
As with the I-20, it is advisable that you show the above documents in your name or your parents’ names.
Remember, property and other fixed assets are not considered valid sources of funds because they are not liquid. There is a lot of misinformation that exists online about showing property (such as land of house) – remember such fixed assets are not going to be acceptable as sources of funds.
Another thing to bear in mind is, while we have given you the above options to show funds for your F1 Visa, at times, Visa officers may not accept insurance or retirement funds as valid sources of funding. So, the right mix of how much funds to show in what category is something we advise on a student-specific basis.
Again, if the amount of funds that you are able to show falls short, we will intervene and provide advice on how you can display the required funds in an acceptable way. However, this advice is on a bespoke basis after we evaluate your specific case. If we need to show any other sponsors apart from yourself and your immediate family, you may have to get an ‘Affidavit of Support’ made (we will provide the format if you have to do this).
What should I ensure when I gather the above supporting financial documents?
There are a few things that you must bear in mind while you collect the requisite proof of financial funds:
- Financial documents should be recent, genuine, and in English or accompanied by certified translations.
- Statements should include the account holder’s name, account balance, currency, date, and bank seal or stamp.
- It is advisable that you show that you hold these funds with reputable financial institutions (for instance, it is preferable that you show savings account or term deposits with nationalized banks as opposed to co-operative banks)
If you wish to know about different types of educational loans that you can avail of, you may want to refer to our write-up on education loans for foreign education.
Also, remember that there are a large number of scholarships that are available for study abroad aspirants (aside of the scholarships offered by universities). We have helped several of our students in securing such scholarships that can substantially reduce the financial burden of your education on your family.
If you have already secured an admit to an American University and need guidance on financial planning and Visa application, you can avail of our Visa Counselling package which is as follows:
