Study Abroad

Everything You Need to Know About Study Abroad Financial Aid

Studying abroad can be expensive for US students but don't let the thought of a high price tag deter you from exploring the world. Learn about how you can use financial aid to pay for your study abroad experience.


  • Yes, you can get financial aid for study abroad! Whether you use existing aid or apply for a first-time loan, funding is within your reach for your overseas adventure.
  • Federal financial aid, private loans, or both are ways to fund your study abroad.
  • If you're already receiving federal financial aid, you can apply that money to your prospective program. You may need to amend the amount you receive to cover the additional program overseas.
  • If you've maxed out your federal financial aid allowance, you may need to take out private loans.
  • Federal and private loans have different interest rates and repayment options so do your research to choose the best for your financial situation.
  • Loan forgiveness programs are available for certain professions if you have borrowed federal financial aid.
Photo by Alana H., YFU Japan Alum

You've weighed the pros and cons of studying abroad and have decided to go for it. One question is heavy on your mind, though: can you afford it with or without student loans?

The cost of attending college or university in the US has been on a steady increase over the past decade. A U.S. News & World Report study in 2021 showed that over a 20 year period between 2002-2022, in-state tuition at US universities rose by 211% and out-of-state tuition increased by 171%. Due to this, more and more students are forced to take out loans to afford higher education. While loans can be extremely helpful and make the dream of college attainable, it definitely complicates studying abroad.

Here at Go Overseas, we believe that the study abroad experience should be accessible to everyone, regardless of their ability to pay. This is why we promote numerous scholarships and grants to help offset the rising costs of education. But what happens when these avenues aren't enough? This is where financial aid comes in.

Whether you go for a few weeks or a year, there are several ways to fund your overseas adventure with financial aid.

1. Consider the program type and location

Photo by Jamie O., Global Experiences Dublin Alum

It goes without saying that shorter programs such as summer study abroad generally cost less than semester or year-long programs. On top of that, there are different formats available that incur varying costs. The types of study abroad programs offered by universities generally include:

  • Faculty/instructor-led programs – tuition is paid to your home university. Classes are either taught or overseen by your faculty at the foreign university. These programs may or may not include housing and meals.
  • Affiliate programs with third-party providers – tuition is paid to the university-approved affiliate program. Affiliate study abroad companies feature big names like CIS and API. These programs usually include housing, meals, insurance, and support but tend to be pricier.
  • Exchange programs – tuition is paid to your home university. This differs from the Faculty/Instructor-led option in that you go alone versus in a group. This entails a higher level of autonomy but more integration into your university. These programs may or may not include housing and meals.
  • Direct enrollment programs – tuition is paid to the foreign host university. If you plan to enroll directly on your own in a foreign university, you need to be sure that your prospective university participants in the US federal financial aid program. The government provides a helpful list of international schools that are eligible to participate in federal loan programs. Note that some schools on the list are categorized as "deferment only" which means you can't use aid there but that your existing loans will go into deferment while you study.

Location can also affect overall cost. For example, countries like Iceland, Norway, and Sweden and cities like London and Paris will have much higher price tags for housing, meals, and transportation. If you're flexible about destination, explore expected costs for living in some of the most popular study abroad countries.

2. Know what types of study abroad loans are available to you

Photo by Sarah D., SAI Programs Alum

Student loans can be taken out through the federal government or through private lenders such as banks or credit unions, and be used for your studies abroad.

Federal financial aid

The US Department of Education provides student loan funding to eligible citizens. This loan money can be used in the U.S. or abroad. If you're planning to use your federal funds overseas for study abroad, you must choose a university-approved program (such as the types listed above) or seek approval should your desired program not be listed.

How to apply your current federal aid

Already receiving federal aid for your US university studies? Then you're in luck! You can apply your current aid package to your study abroad. You should work with your university's financial aid office to determine whether you'll need to apply for an adjustment. If you don't have loans though, you'll need to apply online.

How to apply for loans

To apply for federal student aid, you must fill out the Free Application for Federal Student Aid, or FAFSA. This can be done online and can be completed relatively quickly should you have all the necessary information on hand. This information includes your:

  • Social Security Number (SSN)
  • Parent/guardian's SSN (for dependent students)
  • Alien registration number (for eligible non-U.S. citizens)
  • Driver's license number (if applicable)
  • Federal income tax information
  • Available assets (money in checking, savings, stocks, etc.)
  • Untaxed income

There are both state and federal deadlines every year so be sure to check the website for deadlines where you live.

Once you have submitted your FAFSA, you will receive a Student Aid Report (SAR) which will confirm your details and tell you how much you can borrow in loans.

Types of loans

Based on your education level (undergraduate vs. graduate) and income level, three different types of loans may be available to be used for both general study and study abroad.

  • Direct Subsidized Loans: available to undergraduates demonstrating financial need.
  • Direct Unsubsidized Loans: available to undergraduate and graduate students. They are not based on financial need.
  • Direct PLUS Loans: requiring a credit check, these are available to parents of dependent undergraduates who need extra money to cover education expenses outside of other financial aid.

Amounts for federal loans vary between $5,500 to $12,500 per year for undergraduates and up to $20,500 for graduate students. The amount will be determined by a large number of factors, including how long you intend to study internationally. Each of these have different interest rates and annual award limits

If you're applying for federal loans for the first time you will be required to complete online entrance counseling, which explains the loan process in detail and provides financial planning tools.

Lastly, don't forget: your FAFSA must be renewed yearly!

Private loans

Private loans are an option for students who have maxed out their federal borrowing limits or do not qualify for federal loans. Generally, these applications can be submitted online.

To help students wade through the many private loan providers available, financial website Nerdwallet has detailed the best private student loans. Their article compares interest rates and terms to guide you to a well-informed decision.

It's important to note that unlike federal loans, most private lenders require a credit check. If you don't have a credit history you will need a co-signer. A co-signer could be a parent, guardian, or another adult with a good credit rating who is willing to pay back your student loan should you fall on hard times. There are also providers who don't require a minimum credit score.

3. Pros and cons of federal vs. private loans

Photo by Alfred M., CIEE South Africa Alum

Studying abroad can be a very rewarding and life-changing experience. It's up to you to decide what is best for you and your family's finances, so here are some pros and cons to consider when borrowing money. It's advisable to do extensive research before committing to any loans.

Point to Consider Federal Private
Credit check Only required for PLUS loans Required
Interest rates Highest rates around 6%; fixed Vary by credit rating and can be upwards of 13%; can be fixed or variable
Application Requires tax, income, and personal information Faster and requires less information
Co-signer Not required for Direct Loans Required for weak or no credit history
Repayment plans Yes; can change plan throughout repayment May or may not be able to change plan throughout repayment
Disbursement of funds Tuition paid directly to school; excess funds for living expenses disbursed after overage processed Tuition paid directly to school; excess funds for living expenses disbursed after overage processed
Sources: Sallie Mae and Department of Education

This is only a snapshot of the differences between loan provider options so do your research! High interest rates and inflexible terms can leave you taking two steps forward then one step back in terms of your repayment. Your study abroad education and your finances are both important so starting off on the right foot is key.

4. Understanding repayment of student loans

When your loan comes into repayment, it's vital to understand how repayment works and what plans are available to you. Defaulting on a student loan can damage your credit rating and get you into financial trouble.

Whether you borrow from the government or a private lender, they will work with you to formulate a plan to avoid missing payments. For example, federal student loans have payment plans based on income.

5. Offsetting student loan debt for your study abroad

Photo by Louise D, IES Abroad Vienna Alum

Graduating with a mountain of debt is a serious bummer, but there are ways to offset the amount owed once you leave university.

Study abroad scholarships

Before you take out a loan, be sure to explore possible scholarship opportunities out there for studying overseas. There is free money waiting to fund your education and luckily, Go Overseas has your back. Start digging through some of the scholarships we've compiled for students with a range of backgrounds and fields of study.

Not sure how to make your application stand out? We've got that covered, too! Follow these study abroad scholarship tips to learn what organizations want to see from study abroad candidates and how to put your best foot forward.

Loan forgiveness programs

If your study abroad loan comes from the federal government, loan forgiveness programs exist to eliminate debt-based on years of employment in specific fields. Nurses, doctors, teachers, and more can benefit from these programs.

Usually, work must be done in areas designated as underserved. You will be providing vital services to communities in need all while working to reduce or eliminate your student loan debt.

Check with your individual state or consult the links below to see if your future profession is eligible.

Where will you go?

Photo by Mariana G., Semester at Sea Alum

Now that you know that studying abroad is attainable, where will you go? Start by checking out your university's study abroad website. If you want more guidance, contact your school's study abroad coordinator to schedule a meeting or attend a seminar. Also be sure to check out how to study abroad for free or cheap, which could open up even more possibilities. The world is waiting for you, don't let financial worries hold you back!