Education loan vs savings: how students actually fund their degrees

You’ve got your university offer. You’ve estimated your costs. Now comes the real question, how do students actually pay for all of this?

Many students start by looking at savings. That makes sense. Even so, for most international students, savings alone do not cover the full cost of studying abroad.

That is why the more useful question is not education loan versus savings. It is how the two can work together.

Here’s a practical way to think about it.

First, understand your real costs

Before deciding how to fund your degree, you need a clear view of the full amount.

That usually includes:

• Tuition fees

• Accommodation and living expenses

• Travel, visa and insurance costs

• Daily spending and study materials

For many international master’s programmes, these costs add up quickly. That is why students often use more than one source of funding.

Option 1: Using savings

Savings can include:

• Personal savings

• Family support

• Fixed deposits or other funds set aside for study

Why students prefer savings

Savings can feel like the simplest option.

They can help because:

• There is nothing to repay later

• You do not take on borrowing costs

• You may feel less financial pressure after graduation

Where savings can fall short

Savings can also have limits.

For some students:

• They do not cover the full cost

• Using everything available creates pressure later

• It leaves less room for emergencies or unexpected expenses

Very few students cover an entire international degree through savings alone.

Option 2: Using an education loan

An education loan can help cover the gap between what you already have and what you still need.*

It may help cover:

• Tuition fees*

• Living costs, within approved limits*

Prodigy Finance offers loans for eligible international postgraduate students studying abroad.* When we send the funds to your school, the money goes directly to the university.*

Our current standard product includes USD 100 per month in-school payments, and full monthly repayments begin 6 months after your course is complete.*

Why students choose loans

Students often explore loans because they can help them:

• Move forward without waiting longer to save the full amount*

• Choose a university based on fit, not only immediate affordability*

• Keep some savings aside for flexibility*

What to consider

A loan can support your plans, and it still needs careful thought.

It helps to remember:

• You will repay the loan over time*

• Your offer depends on your profile and chosen programme*

• Planning ahead matters*

So how do students actually fund their degrees?

In practice, many students use a mix of both.

A common approach looks like this:

• Savings to cover part of the cost

• A loan to help cover the remaining gap*

This creates balance. You reduce how much you borrow, while still giving yourself a way to start your degree on time.*

A simple example

Let’s say your total cost is USD 70,000.

• Savings: USD 20,000

• Remaining gap: USD 50,000

Instead of waiting years to build more savings, some students choose to use the money they already have and explore a loan for the rest.*

That can help them move forward without exhausting every available resource.*

When savings may matter more

You might rely more heavily on savings if:

• You already have significant financial support

• Your programme is shorter or lower cost

• You want to keep borrowing to a minimum

Even then, many students choose not to use every available saving upfront. Keeping some money aside can make it easier to manage surprises during your studies.

When a loan may become more important

A loan may play a bigger role if:

• Your savings do not cover the full cost*

• You want to study at a university with higher overall costs*

• You prefer not to use all your funds at once*

In that case, the loan becomes part of a broader funding plan rather than a last resort.*

The more useful mindset shift

Instead of asking, should I use savings or a loan, it helps to ask a different question.

How can I use both in a way that supports my future?

Because funding your degree is not only about today’s costs. It is also about timing, opportunity and what your study plans may lead to later.

A quick student scenario

Imagine you have two options.

You could delay your studies for a few years while saving more. Or you could start now using a mix of savings and a loan.*

If starting earlier helps you begin your degree and enter the job market sooner, the second path may make more sense for your situation.*

Final thoughts

Savings can give you stability. Loans can give you access.*

Used together, they can help you:

• Reduce financial pressure

• Keep more flexibility in your plan

• Move forward without unnecessary delays

That is how many students actually fund their degrees, by combining what they already have with the support they still need.

Ready to explore your options?

If you’re planning your funding mix, you can check your loan eligibility and see what may be available based on your profile and chosen programme.*

*Loan and promotion offers are subject to our eligibility, funding, and credit assessment criteria. Loan amounts are subject to the cost of attendance limits set by schools.