Your Financial Guide to Studying Abroad

There are a variety of funding options to help you cover tuition, as well as travel expenses and boarding, so you can study abroad for a semester or two.


Each year, hundreds upon thousands of students study abroad in countries all over the globe to immerse themselves in a new culture, learn a new language, or conduct research in their area of study. More students than ever before are taking the plunge, too. According to the U.S. Department of Education, the number of U.S. students studying abroad grew more than 100% from 1998-99 to 2008-09 — from 99,448 students to 260,327. More recent figures from the Institute of International Education put the number of students studying abroad at 273,996 — or 9.1% of all U.S. undergraduates.

The majority of students feel they are prevented to travel abroad for a variety of reasons; they don’t have the time in their schedules, don’t have the interest, or don’t think they can afford it. If you’re among the latter, keep reading; there are a variety of funding options to help you cover tuition, as well as travel expenses and boarding, so you can study abroad for a semester or two or even enroll directly in a foreign institution and not wind up paying too much out of pocket. Money doesn’t have to get in the way of this unique experience.

“Students that don’t take advantage of this opportunity are really going to be missing a big part of their education,” says independent education consultant Jason Lum, founder of ScholarEdge. “It’s one of the few times in life that you can do it, and there are the financial resources to do it.”

Here’s a rundown of your options to help fund your study abroad adventure:

Federal Loans

If you’re currently studying in school, chances are you’re already familiar with the financial aid process. And just how government funds can help students study in the United States cover college tuition, students studying abroad may also be able to help pay for their international school’s tuition with the help of federal loans. The following loans are offered through by the U.S. Department of Education and are available to U.S. citizens or permanent residents studying at the undergraduate or graduate level:

Subsidized and unsubsidized loans:

Undergraduate students may be eligible to receive subsidized and unsubsidized loans, depending on their need, for their studies abroad. If subsidized, the government pays the interest on the loan while the student is in school. If unsubsidized, the loan collects interest and is added to the student’s balance. Interest rates are currently 3.4% for subsidized loans and 6.8% for unsubsidized loans. The total amount you can borrow ranges from $5,500 to $20,500, depending on a number of factors such as your year in school and status as a dependent or independent student.

PLUS Loans:

Graduate students and parents of dependent undergraduate students can also apply for PLUS Loans to help pay for the costs of college and education expenses not covered by other financial aid. These loans have a fixed interested rate of 7.9%, and the maximum loan amount available is the student’s cost of attendance minus any other financial aid received.

It’s important to keep in mind that not all government aid can be put towards study abroad. For instance, the U.S. government won’t send any grant money, such as the Federal Pell Grant, SMART grants, or TEACH grants, to any overseas school. It also only sends federal aid to select schools abroad. You can check for eligible schools here, searching by “foreign country” or by checking this list.

For students doing a short-term study abroad for a semester or two, in most cases, the financial aid they are already receiving at their domestic school will transfer to their international school. If you’ve arranged a study abroad through your school here, it may even adjust your financial aid budget to cover all program costs. Lum was able to transfer all of his financial aid to McGill University in Montreal while an undergraduate student at Washington University in St. Louis. But it’s important to check with your school and your international school to find out what your unique case is, as well as any important forms to submit and deadlines to meet.

“What I always recommend to students is to do it through their college or university,” says Lum. “It’s a fairly simple thing to do and completely eliminates the need for the student to go hunting for financial aid from the school they’re visiting.”

Those students who are directly enrolling in a foreign school and not going through an American institution should check to see if their school is among those noted by the Education Department to receive federal aid. Additionally, students must be attending an educational program that is at least one year in length and leads to a certificate, diploma, or full degree to be eligible to receive federal student loans. Correspondence or distance education programs are ineligible for federal aid.

To apply for any federal financial aid, students must submit a Free Application for Federal Student Aid, or FAFSA. There is no special FAFSA for students planning to attend international schools, but those anticipating studying abroad should submit their FAFSA as early as possible to make sure they receive all available aid.

Private Loans

Not every student going to college receives financial aid, and you may find that you don’t have enough funds to cover all of your study abroad expenses. In that case, private loans are also an option. These fall into two categories, depending on whether U.S. students are doing a short-term study abroad or directly enrolling in an international school:

Private study abroad loans:

These loans are geared towards students who are enrolled in a U.S. school and are doing a short-term study abroad. To be eligible, students need to be attending a study abroad program approved by their home school and receiving credit for it. Two popular providers of study abroad loans are InternationalStudentLoan.com and StudyAbroadLoans.com. Rates and loan limits will vary by provider, and students must be attending schools approved by the provider to be eligible for any loans.

Foreign Enrolled Loans:

These loans are geared towards U.S. students who are directly enrolled in and working towards a degree from a non-U.S. school. Like private study abroad loans, schools must be approved by the lender. Foreign loans are also offered through InternationalStudentLoan.com. These loans have loan limits as high as $50,000 to $70,000 per year, depending on the program, but are school-certified, meaning you cannot borrow more than you need. As a result, students can apply for a loan for up to the total cost of education, minus any other aid received.

Scholarships

If the idea of paying back a federal or private loan isn’t appealing, scholarships are another potential way to help cover part — or even all — of your trip abroad. Scholarships can be very competitive and based on any number of factors and edibility requirements, but here are a few good places to start looking:

  • Your school: If you’re studying abroad through a U.S. institution, look into any scholarships your school awards. Students attending the University of California, for example, can vie for more than $1 million in scholarships the school system is dedicating for the 2013-2014 school year to expand study abroad opportunities.
  • Rotary International: As a graduate student, Lum was able to study at the University of Singapore for a year — completely for free — thanks to a scholarship from Rotary International. Through its Ambassadorial Scholarship program, the service institution has awarded $532 million to students like Lum pursuing studies abroad. Beginning in 2013-2014, the foundation will offer scholarship opportunities through global grants to fund graduate-level academic studies that are based in the Rotary’s areas of focus: peace and conflict resolution; disease prevention and treatment; water and sanitation; maternal and child health; basic education and literacy; or economic and community development.
  • Scholarship websites: There are millions of dollars in scholarship money out there for anything from being tall to speaking Klingon; you can bet there are scholarships for students studying abroad as well. These awards may be based on where you’re studying, what you’re studying, or strictly merit-based. You can find ones that are suited for you through lists, databases and directories created by organizations like the Institute of International Education, Fastweb, College Prowler, International Scholarships, and International Financial Aid and College Scholarship Search.
  • Graduate award programs: The more outstanding students out there may be interested in prestigious, selective scholarships that are awarded by the U.S. and United Kingdom. The Fulbright Program is one such opportunity that offers fellowships for U.S. graduating seniors, graduate students, young professionals, and artists to study abroad for one academic year. Sponsored by the U.S. Department of State, it operates in more than 155 countries and provides 8,000 grants annually. The Marshall Scholarship program is another prestigious opportunity that is even more selective in terms of students and region of study – it offers up to 40 American students the opportunity to study at graduate level at an institution in the United Kingdom. The Rhodes Scholarship is another notable UK program, awarding 32 American students a year for graduate study at the University of Oxford.

Resources

Every student’s means and needs are unique. Even with a basic understanding of federal funds, private loans, and scholarships, the financial aid process can be complicated and confusing. But you don’t have to go through this alone. Here are some resources you can refer to for more information, both online and in-person, to make sure you get the most, financially-speaking, out of your study abroad experience:

  • IFAP: Find answers to your study abroad questions at the IFAP, or Information for Financial Aid Professionals, website. This government site contains information, resources, and guidance on the federal student aid process, including a helpful Q&A on studying at foreign institutions.
  • Federal Student Aid: There’s more federal financial aid help online. This office of the U.S. Department of Education provides a comprehensive guide on receiving federal student aid to pay for study at international schools, whether it’s a study abroad for a semester or year or obtaining a degree from an international school. You can find information on anything from researching schools to repaying your loan.
  • Your college: If you’re studying abroad through a U.S. college or university, then you should definitely become friends with the staff of your school’s study abroad office. These administrators have already sent countless students like yourself abroad and can help you with any financial aid questions you may have, point you to relevant scholarships, and overall make sure your expenses are taken care of. They can also help you with other logistics, such as obtaining necessary Visas and finding boarding.

  • Private education consultants: If your school doesn’t provide much in the way of study abroad assistance, or you’re looking to earn your degree from a foreign institution and want some one-on-one guidance along the way, a private education consultant can walk you through this process — for a fee — of course. That can mean help applying for financial aid, loans, and scholarships, as well as assistance in obtaining any necessary paperwork to study abroad. The best part is, they’ll know what mistakes can happen to help prevent you from making the same ones yourself.

If you’re considering studying abroad or enrolling full-time in a foreign institution, don’t wait until the last minute to explore your financial aid options. There are a number of avenues to consider that have different deadline and application procedures to strictly follow. But if you play your cards right, you can make your study abroad dreams an affordable reality.

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