Can You Get a Student Loan To Study Abroad? Here's What To Know

Studying abroad can be a valuable part of your college experience, but the costs can add up quickly. In addition to tuition and fees, you may need to budget for airfare, housing, meals, insurance, and other expenses while you’re overseas.

Federal and private student loans can generally be used for approved study abroad programs, but before borrowing, it’s important to understand which loans you qualify for and whether taking on additional debt is worth it.

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Can you get a student loan to study abroad?

You can use federal and private student loans to pay for an approved study abroad program. 

Federal student loans can often be used if you stay enrolled at your home school while studying overseas. Your school must approve the program, and the credits you earn generally need to count toward your degree. You can use federal loan funds for eligible education costs such as tuition, fees, housing, meals, and airfare. The study abroad program must also meet federal student aid requirements.

Private student loans can also be used for study abroad programs. Approval and loan amounts depend on the lender’s requirements, including your credit, income, and study abroad program.

See Also: Best Student Loans for Studying Abroad

How do federal student loans work for studying abroad?

You’ll need to submit the Free Application for Federal Student Aid (FAFSA) before you can receive federal student loans for an eligible study abroad program.

If your program is approved by your home school, it typically handles your financial aid and applies it toward your study abroad costs. Eligible students may be able to use:

• Direct Unsubsidized Loans
• Direct Subsidized Loans
• Direct PLUS Loans

Federal student loans have annual and lifetime borrowing limits, which means these loans may not be enough to cover your total costs.

Can private student loans cover study abroad costs?

Private student loans can help cover study abroad costs if you need additional funding after federal student aid. You can find these loans through banks, credit unions, online lenders and, in some cases, your home or host school.

Each lender sets its own eligibility requirements, borrowing limits, interest rates, and repayment terms. Lenders also review your credit score and income when you apply. If you don’t meet those requirements on your own, you may need a cosigner with strong credit to qualify.

Which type of loan is best for study abroad? 

Federal student loans are usually the better borrowing option because they come with low,fixed interest rates and borrower protections like income-driven repayment plans and payment relief options for borrowers experiencing financial hardship. 

Private student loans can help fill a remaining funding gap, but they generally offer fewer repayment protections and may have higher interest rates. Consider them only after you’ve exhausted scholarships, grants, and federal student loans.

Here’s how federal and private student loans for study abroad compare:

Is studying abroad worth the debt?

Before taking out a private loan for study abroad, consider whether the experience is worth the additional debt — especially if you’d need to borrow a large amount or ask someone to cosign.

“If you've exhausted grants, scholarships, and federal aid and still need a large private loan to study abroad, our default advice is uncomfortable but simple: maybe you shouldn't go,” says Jake Williams, a partner at Ivy Brothers, a New York City-based college admissions consulting firm.

That doesn’t mean studying abroad isn’t valuable. But the benefits of a semester overseas should be weighed against how long you could be repaying the loan after you return.

“Four months abroad can be amazing. It is not automatically worth years of debt, and it certainly isn't automatically worth putting a parent or relative on the hook as a cosigner,” Williams says.

How much should you budget for a study abroad program?

Start with your program’s published tuition and fees, but don’t stop there. Your total study abroad cost can also include travel, housing, meals, and everyday expenses while you’re overseas.

Make sure your budget accounts for:

• Passport and visa fees: Include application and processing fees if you need a passport or visa for your destination.
• Health insurance: Check whether coverage is included in your program fees or if you’ll need to pay for a separate policy.
• Flights and transportation: Budget for airfare to and from your host country, plus public transportation, trains, or other travel while you’re abroad.
• Housing and meals: Costs can vary widely depending on where you live, whether meals are included, and your spending habits.
• Personal expenses: Include costs such as toiletries, clothing, household items, and other everyday purchases.
• Books and school supplies: Budget for textbooks, course materials, a laptop, or other required equipment.

Ask your home or host school for an estimated cost of attendance or study abroad budget to help you plan. It’s also a good idea to build some extra room into your budget for changes in currency exchange rates and unexpected expenses.

Consider when you’ll need the money, too. Some expenses may come due before you leave or well before any income or stipend arrives.

“Most students plan the amount and forget the timeline,” says Harold Pullen, study abroad facilitator and founder of GrandRoyal Travel.

One period to plan for is the time between arriving in your host country and receiving your first paycheck or stipend. Pullen recommends budgeting for “two to three months of rent and food with no income.”  

“Miss that window in your budget, and you end up borrowing in a panic at the worst possible rate,” Pullen says.