Making US Undergraduate Education Affordable: Exploring Different Sources of Funding
Updated on Jun 13, 2017 - 6:21 p.m. IST by Renuka Raja Rao

The cost of higher education is an important factor in the decision-making process and strongly influences the final decision whether to go or not. The US is the higher education magnet for the world, with more than a million students from practically every country in the world on US campuses last year (Open Doors). For undergraduate education, the financial stakes are higher than for graduate studies, since the duration is longer and the costs are proportionately higher.

Students and parents should include financial planning alongside the application process, at least 12-18 months in advance. Following the 5 Steps to US Higher Education prescribed by the US Department of State and seeking the help of the EducationUSA centers across India ensures access to accurate, current and comprehensive information.

The components of the cost of undergraduate education in the US are:

  • Tuition – ranges from US$ 15,000 to US$ 45,000+ per year

  • Living expenses – range from US$ 8000 to US$ 20,000+ per year

  • Other expenses – health insurance, books and supplies, clothing, vacations – budget a minimum of US$ 4000; no upper limit

The principal sources of funds for undergrad education in the US are:

  • Family funds

  • Bank loans

  • Funding from the university/college where the student is admitted

  • Working while studying in the US

Most undergrad students in the US are financed by their families, and often take bank loans to supplement the total amount. A small number of talented, high-achieving students with outstanding profiles receive financial aid from American universities and colleges. It is quite well-known that private universities such as Harvard, Yale, Stanford, Princeton and hundreds others have war-chests of endowments. Harvard’s 30 billion+ has been built up over centuries. Some of the returns from these endowments are used to fund exceptionally qualified students, including international students. Students may receive from as little as $2,000 all the way up to the full free ride ($65000+). Information on financial aid at various American universities and colleges is available at EducationUSA centers around the country.


Students who receive substantial funding for undergraduate studies in the US are typically in the top percentiles as far as their class performance, standardized tests, and other academic indicators go. They are usually BWRKs – Bright, Well-rounded Kids with a deep, demonstrated interest in particular subjects or areas. Leadership abilities, community service, extracurricular activities or outstanding sport talent and abilities weigh in favor of applicants. Funding for international students is possible at private universities and colleges. State universities and colleges are generally unable to fund international students at the undergrad level, since their mandate is to educate the tax-paying residents of the state they are located in. There are a few exceptions to this general rule.


It is possible to work while a full-time student in the US and earn some money, both during term-time, as well as during vacations. It is important to understand the regulations that govern CPT and OPT.

  • Curricular Practical Training (CPT) has to be integral to the student’s major and the experience must be part of the program of study
  • Optional Practical Training (OPT) is temporary employment that is directly related to an F-1 student’s major area of study. An F-1 student could be authorized to receive up to a total of 12 months of practical training That may be extended for a further 24 months for students of STEM (Science, Technology, Engineering and Math)
  • Students should ensure they follow all the directions and advice provided by the US government. Click here for more information.


Students should understand that there is no guarantee that work will be available. Both CPT and OPT may pay the minimum wages, which varies from state to state, and sometimes CPT may not pay any wages. The focus of the CPT/OPT is the practical training that will accrue to the student – not the amount earned, which is incidental.


With proper planning and realistic expectations, the journey to a US campus is easier. Help is available at USIEF and EducationUSA ( and


The author,  Ms. Renuka Raja Rao, is Country Coordinator, EducationUSA.


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