Can I Get a Student Loan to Study Abroad?
Planning to study abroad? Learn how to navigate student loans, from initial eligibility to receiving funds, to finance your global education.
Student loans can provide a pathway for individuals seeking to pursue academic endeavors in another country. They help cover expenses like tuition, fees, living costs, and transportation for international education.
Eligibility for Study Abroad Loans
Student loans for international study require meeting specific criteria for both the student and the program. A student must be a U.S. citizen or an eligible non-citizen, such as a permanent resident or certain visa holders. Students are required to be enrolled at least half-time in a degree or certificate program and demonstrate satisfactory academic progress as defined by their institution. A valid Social Security number is also a common requirement for federal aid applications.
The educational program must also meet certain conditions for loan funding. For federal student aid, the U.S. home institution must participate in federal student aid programs and approve the study abroad experience. This approval means credits earned overseas will transfer back and apply towards the student’s degree. If a student plans to directly enroll in a foreign institution for a full degree, that institution must be recognized by the U.S. Department of Education and participate in the Direct Loan Program. Programs offered entirely through correspondence or distance education generally do not qualify for federal financial aid.
Types of Student Loans for Study Abroad
Two primary categories of student loans are available to help finance international education: federal and private. Federal loans, provided by the U.S. government, offer favorable terms and borrower protections.
These include Direct Subsidized Loans for undergraduates with financial need, where the U.S. Department of Education pays interest during certain periods. Direct Unsubsidized Loans are available to all undergraduate and graduate students regardless of financial need, with the borrower responsible for all accrued interest. Direct PLUS Loans are an option for graduate and professional students, and parents of dependent undergraduates, though these require a credit check.
Federal loans typically feature fixed interest rates and offer flexible repayment plans. Annual loan limits for subsidized and unsubsidized loans range from approximately $5,500 to $20,500, while PLUS Loans can cover up to the total cost of attendance minus other financial aid received.
Private student loans are offered by various financial institutions, including banks and credit unions. These loans can cover up to the full cost of attendance, less any other aid received, providing a flexible option for funding remaining expenses.
Private loans frequently require a U.S. citizen or permanent resident co-signer, especially for international students who may not have an established credit history in the U.S. Interest rates on private loans can be fixed or variable, and their repayment terms vary significantly among lenders, making it essential to compare options carefully.
Applying for Study Abroad Loans
The application process for student loans to study abroad differs for federal and private funding. For federal student loans, the initial step involves completing the Free Application for Federal Student Aid (FAFSA). When completing the FAFSA for a study abroad program, list your U.S. home institution, not the foreign university, if studying through an approved program. The FAFSA submission determines your eligibility for various federal aid programs.
After submitting the FAFSA, you should contact the financial aid office at your U.S. home institution to discuss your study abroad plans and confirm the specific aid you may receive. During this process, you will need to gather essential documents, such as your academic records, proof of enrollment or an admission letter from the study abroad program, and a detailed cost of attendance breakdown.
For private student loans, the application is submitted directly to the chosen lender, and the FAFSA is not required. Private lenders will request personal information, details about your school and program, academic records, and often income documentation, particularly if a co-applicant is involved.
Receiving and Managing Your Loan Funds
Once your student loan for study abroad is approved, understanding the disbursement process is important. For federal student loans, funds are typically sent to your U.S. home institution first. The institution then applies these funds to any outstanding tuition and fees, and any remaining balance is subsequently disbursed to you.
Disbursement dates can vary by school, but funds are often released at the beginning of each academic term or semester. Private loan disbursement methods can differ, with some lenders sending funds directly to the student and others disbursing them to the educational institution.
Anticipate that loan funds may not be available immediately upon your arrival abroad; plan for initial travel and settling-in expenses. Managing funds in a foreign country involves considering international banking options and foreign currency exchange rates. Maintaining thorough records of all financial transactions and communications with your financial aid office can help prevent misunderstandings. While specific repayment plans vary by loan type, repayment generally commences after you graduate or cease to be enrolled at least half-time.