New loan scheme to help Africans study in the US to launch soon

Across the world, many students struggle to afford an education abroad. This latest offering in student loans for African students may just help those seeking to study in the US.

Fintech company 8B Education Investments, plans to provide up to US$30 million in loans to help African students afford an international degree.

It is the latest of many financial institutions to offer student loans for African students.

“It’s necessary for Africa to partake in shared prosperity,” the Kenyan-born founder and CEO Lydiah Bosire told financial media company Benzinga. “I started 8B in order to fill in gaps I saw from my own experiences as a student who sought to transform the world.”

The five-year-old startup’s collaboration with US-based Nelnet bank is the “first-of-its-kind” partnership to get more African students into North American institutions.

“The world is opening up for global talent and we want to be there to shepherd African talent through the gates,” Bosire adds. “An American bank has never done this.”

In the US, most international students cannot access federal loans. They also don’t qualify for loans with any US bank without proof of residency, US credit history and a co-signer who is a US citizen or permanent resident.

Previously, companies like Prodigy Finance and MPOWER were the few lenders providing loans to international students.

“US-regulated banks that have a student lending arm are typically unable to lend to non-US students unless they have a couple of particular characteristics, one of which would be a [US] co-signer,” said Sam Weber, Chief Sales and Marketing Officer at Prodigy Finance to Inside Higher Ed.

“The whole premise of the offering is the talent is proven for us by admission to some of the best programmes in the world. We’re willing to lend based on that potential and the jobs students will get after that.”

Most student loans for African students require an American co-signer to take on the debt. Source: Maddie Meyer/AFP

Student loans for African students: How more can join US universities

In 2021-22, African students made up approximately 4% of international students in US universities, according to The PIE News.

Bosire highlights that “there are not enough African students in these spaces.”

She adds that 8B’s mission to invest in the market of 18 to 23-year-olds would tremendously encourage and increase mobility for African students to access higher education abroad. 

“Most African students are on scholarships and very few of them have a financing solution,” Bosire tells Benzinga.

“With a financing solution, that enables the university to step in with some skin in the game, bringing the balance between revenue and diversity concerns.”

Those who have applied for Science, Technology, Engineering, Mathematics, Accountancy and Finance programmes are eligible to apply.

These student loans for African students will be launched in April 2023.

During their programme, students will repay only the interest on their loans. The full repayments start six months after graduation and span seven years.