As Study-Abroad Programs Return, Here Are Ideas  To Pay for Them

Carol Katarsky Updated on April 14, 2021

College is all about broadening your horizons. And studying abroad offers a unique opportunity to do so. It's a cultural experience, as well as an opportunity to take specialized courses not available elsewhere, go deeper in your language studies, build your resume, and grow your network. There's a reason nearly 350,000 U.S. students studied abroad in the 2018-19 school year.

Of course, due to the COVID-19 pandemic, many study-abroad options have been limited or cancelled. But if you're planning for a semester abroad down the road, we've got some information that can help. 

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Study-abroad programs aren't cheap, but the cost varies widely depending on your university, your chosen location, and the aid available to you. You can use your regular financial aid to help fund your study-abroad program. You may also be able to use funds from private student loans, but you'll need to work with your U.S.-based school to do so. 

Financial aid can cover the cost of studying abroad, but in some cases you may also need to fund your program with private loans. Thankfully, some lenders allow you to use funds from private loans to cover your costs.

Here's what you should know about using federal and private loans to pay for study abroad.

Can you use FAFSA to study abroad? 

Yes, you can use financial aid to cover the cost of studying abroad, thanks to the Higher Education Act of 1992. This legislation allows a student to receive and use federal grants, loans, and work assistance for a study-abroad program that's approved by the U.S.-based university the student is enrolled in. That's true regardless of whether your degree plan requires study abroad.

Among the types of aid you can apply to your study-abroad costs are:

  • Direct Subsidized Loans 
  • Direct Unsubsidized Loans
  • Direct PLUS Loans
  • Federal Pell Grants
  • Federal Supplemental Educational Grants (FSEOG) 
  • Department of Education-funded programs designed for study abroad, like the Benjamin A. Gilman Scholarship Program, which is open to Pell Grant recipients, and the Foreign Language & Area Studies Fellowship program, which funds study-abroad experiences for both undergraduate and graduate students pursuing foreign language and area studies, and
  • Institutional aid, which is often based on need.

Once you apply to a specific study-abroad program, you'll need to work with your school's financial aid office to determine:

  • How much aid you're eligible to receive
  • How much can be applied to your study abroad program, and
  • How much you're expected to pay out-of-pocket. 

Keep in mind that sometimes your study-abroad program may be more expensive than attending your home school. Make sure to have a solid understanding of the numbers before you buy your plane ticket. 

Private student loans for studying abroad

If you don’t qualify for federal aid for study abroad or if you need to fill a financial gap, you might need to look to private student loans.

It's important to note that most student loan lenders will not directly finance study-abroad programs. What that means: They generally won't disburse funds directly to a foreign university. However, many lenders will allow funds they disbursed to a U.S.-based school to be applied to study-abroad programs. Essentially, your lender pays your home school and your home school applies the funds to your study-abroad school. 

If you'd like to take out a private loan to fund a study-abroad program, be sure to do the following two things:

1. Talk to your financial aid office to ensure they're able to apply funds from private loans toward your study-abroad program. Chances are they can, but you may have to follow certain procedures to do so.

2. Call or online-chat with customer service for any lenders you're considering applying with. Important: Do not ask if they have loans for studying abroad. Do ask if the funds from your student loan can be applied to a study-abroad program through your college or university. 

What to consider before taking out a private loan

Sure, you're excited to sign the documents necessary to finance your trip and education abroad. But there are a few considerations.

First of all, have you exhausted all sources before turning to private loans? For instance, you can look for scholarships designed to help fund study-abroad opportunities.

See alsoNitro's College Scholarship Guide

There are also other ways to fund your expenses, like side hustles and working over the summer.

If scholarships, financial aid and income generated from jobs aren't enough to cover the expenses, then it's time to look at private loans. Here are a few tips to remember about private loans:

  • Never take out a loan for more than what you need
  • The interest on private loans will accrue while you're still in college. If you're not making at least interest-only payments on your loan, your balance at graduation will be far higher than what you originally took out
  • Not all private student loans or personal loans offer a grace period like federal loans do. So you may have to start paying your loan right after you graduate, or even before. Be sure to understand the payment terms before you sign on the dotted line.

Want to check out current loan rates and terms? See our picks for the best deals on private student loans

Published in: How to Pay for College

About the Author
Carol Katarsky

Carol Katarsky is a contributing writer for Nitro. She is an award-winning journalist with extensive experience writing about both finance and education. Her corporate and non-profit clients include AIG, Children's Hospital of Philadelphia, and the Project Management Institute. She lives in Philadelphia with her husband, son, and one cat more than she should. Read more by Carol Katarsky

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