Student Loans for Study Abroad

Francine L. Huff
LoanBiz Columnist

Study abroad has increased by 150% over the last decade, with more than 220,000 U.S. students studying abroad in 2007, according to the Institute of International Education. The chance to learn about different cultures, study a foreign language, and gain a more global perspective are some of the reasons students choose to spend a semester, or even their entire college experience, abroad. For those who choose this route, it's important to know which student loans can help pay for their education.

Eligibility for Federal Loans

Stafford Loans, obtained through the Federal Family Education Loan (FFEL) program, are available for U.S. citizens and permanent residents who are:

• Enrolled at least half time in a study abroad program at an eligible U.S. school or university and who plan to receive their degree at the U.S. institution.
• Enrolled at least half time at a qualified foreign college or university and who plan to receive their degree from the foreign institution.
  

To apply for a loan to study abroad, all applicants must complete a Free Application for Federal Student Aid (FAFSA). Students planning to earn their degree abroad also have to take a few additional steps during the loan application process. Obtain specific loan application information from whichever school will be granting your degree.

Federal Student Loans

Annual loan limits for Stafford Loans depend on a student's year in school, but there is a lifetime cap of $23,000 for dependent undergraduates, $46,000 for independent undergraduates, and $138,500 for graduate or professional students. Parents can apply for low interest Stafford PLUS loans to help their kids pay for undergraduate or graduate educational expenses.

Another federal loan, the Perkins Loan, helps the neediest students pay for their education. Students enrolled at least half time in a study abroad program at an eligible U.S. institution may be eligible for the Perkins Loan and should contact their financial aid office for information.

Private Student Loans

Paying for travel and housing expenses can really add up when studying abroad. For students who find that federal student loans don't cover all of the fees and expenses associated with study abroad, private student loan programs are also available. Private loans can be used to pay tuition and fees as well as airfare, housing, supplies, and cultural excursions. Private student loans are generally privately insured, carry a higher interest rate than federal loans, and are based on credit-worthiness.

The cost of an international education shouldn't intimidate anyone who wants to study abroad. In addition to student loans, grants, scholarships, and fellowships may be available to help fund the experience. Planning ahead can ensure that students get all the aid they need.

Sources
Institute of International Education
SallieMae

About the Author
Francine L. Huff is a freelance journalist and the author of The 25-Day Money Makeover for Women. She has appeared on a variety of TV and radio shows.