Student Loans for Studying Abroad: What Are My Options?

Interest in studying abroad is on the rise. During the 2022-23 school year, the number of students earning credits overseas increased by nearly 50%, according to NAFSA: Association of International Educators.

However, the cost of these programs can be a significant barrier for many students. Fortunately, you have options to cover the expense, including federal and private student loans, scholarships, and grants.

Current private student loan rates

Can I get a student loan to study abroad?

You can use both federal and private student loans to finance a study abroad program.

To qualify for federal student aid, you must be enrolled at a school that participates in the federal student aid program. If federal loans don't cover the full cost of your study abroad program, private student loans can help fill the gap.

However, there are specific requirements you'll need to meet to qualify for aid. “A number of criteria determine eligibility, such as the student's academic standing, approval from their home university, and enrollment in an accredited institution,” says Dr. JoNataye Prather, an education consultant.

“Students must maintain a minimum GPA and show that their curriculum satisfies degree requirements for many programs,” she adds.

Federal loans for studying abroad

To use federal loans for a study abroad program, you'll need to fill out the Free Application for Federal Student Aid (FAFSA). The Department of Education will use your financial information to determine your eligibility for federal aid, including grants and loans that can be used to cover study abroad expenses.

After receiving your award letter, work with your school's financial aid office to find out which types of aid you can use for your study abroad program. It's important to start this process early to ensure you meet all deadlines and complete the necessary paperwork for both your U.S. school and the international institution.

Private student loans for studying abroad

Private student loans can help cover the cost of studying abroad, but they're usually more expensive than federal loans. They also come with less flexible repayment terms and don't offer loan forgiveness.

On the plus side, most private lenders let you borrow as much as the full cost of attendance at your school, and this typically considers the cost of your study abroad program. This can be helpful if federal loans don't cover your full study abroad costs.

Here are some popular loan options for study abroad programs if you're attending an eligible U.S. university approved by the lender:

Scholarships and grants for studying abroad

Scholarships and grants are another way to fund study abroad programs, and they don't have to be repaid. To find the right opportunities, start by checking with your school's study abroad office. Many universities offer scholarships specifically for students studying abroad.

“The Fulbright U.S. Student Program, the Benjamin A. Gilman International Scholarship, and institution-specific study abroad awards are some of the financing options available to students,” explains Prather.

“Sites like StudyAbroad.com, GoAbroad.com, and Fastweb.com have extensive databases of scholarships,” she adds.

Tips for financing your education abroad

Here are some realistic tips for financing your studies outside the U.S.:

Create a budget

Before studying abroad, create a budget that includes your accommodations, airfare and transportation, and daily expenses. Research the average cost of living in your destination country so you won't be caught off-guard.

Look for work opportunities

“Some countries allow students to work part-time while studying, which can significantly help cover the cost of education,” says Ohan ​​Kayikchyan, a certified financial planner (CFP) with a doctorate in economics. Just make sure to check the visa regulations for the country you're headed to.

Consider fundraising

Think about fundraising the year before your trip abroad. You might find that your family and friends are willing to contribute to the costs of your study abroad.

“In recent years, platforms like GoFundMe have become popular for raising funds for expenses related to studying abroad. However, these platforms require significant effort and may not always be successful,” cautions Kayikchyan. “It's also crucial to ensure that you use them responsibly and ethically.”