Student Loans for Study Abroad

Studying abroad has multiple benefits: You can boost fluency in another language, immerse yourself in a new culture, and give yourself a competitive edge when you enter the workforce. 

It’s an experience you won’t regret or forget, and with the plethora of funding options available, going abroad is well within your reach. U.S. students can use federal and private student loans to pay for study abroad expenses. Keep reading to learn how to finance your overseas study. 

Compare student loans for study abroad

Lender	Best for	LendEDU rating
Department of Education	Federal student loans	Not rated
College Ave	Private student loans	5/5
Sallie Mae	Cosigners	4.8/5
Ascent	No cosigners	4.4/5

Federal student loans for study abroad

To use federal education loans to study abroad, the school you’re attending must be eligible to participate in the Direct Loan program. The Office of Federal Student Aid maintains a database of eligible international schools.

Federal study abroad loans for U.S. students can be used to pay tuition and fees, room and board, and other qualifying costs. Any leftover funds are disbursed to you, which you can then use for travel to your destination country or basic living expenses. 

However, Federal Pell Grants can’t be used for studying abroad, and federal loans may not cover all the costs of studying overseas.

Private study abroad student loans

If you’ve exhausted your federal loan options, consider private student loans to cover the gaps. The lenders below offer private student loans for study abroad.

College Ave

Sallie Mae

Ascent

Alternatives to education loans for study abroad

Study abroad student loans can be convenient, but they aren’t the only way to pay for your education. Here are other ways to cover study abroad costs without creating a debt obligation.

529 college savings plan distributions

A 529 college savings plan is a tax-advantaged plan you can use to pay for higher education expenses, including costs associated with studying abroad. Contributions to a 529 savings account grow tax-deferred, and withdrawals are always tax-free as long as they are used to pay for qualified higher education expenses.

Parents can set up a 529 plan for their children, but you can also create a 529 plan for yourself if you’re 18 or older. You’d name yourself as the beneficiary and contribute money on your behalf. That money is invested in mutual funds or other investments inside the plan, growing until you need it to pay for study abroad.

If you have time to save, a 529 savings account could be wise. Depending on how you invest it, you could earn a much better return rate than a high-yield savings account or certificate of deposit (CD) account.

Scholarships for study abroad

Scholarships are a terrific option to consider for study abroad because, in most cases, this is money you don’t need to repay. Scholarships can be need-based or merit-based. Others are based on your area of study, while still more are diversity-based.

If you’re interested in finding study abroad scholarships, start with your school’s financial aid office. You can also research scholarship options online or contact your college’s study abroad coordinator. 

Here are some of the most noteworthy scholarships for students looking to go abroad:

• U.S. Department of State Benjamin A. Gilman International Scholarship Program: The State Department offers this scholarship for students with limited financial means who are interested in studying abroad or completing an internship overseas.
• Fund for Education Abroad Award:  The Fund for Education Abroad Award provides up to $5,000 in funding for students who are underrepresented in the U.S. study-abroad population, including students of color and first-generation college enrollees.
• Boren Language Scholarship: The Boren Language Scholarship is designed for U.S. undergraduate and graduate students who plan to study abroad in countries outside of Western Europe, Canada, Australia, or New Zealand.
• Rotary International Scholarship: The Rotary Club funds scholarships of $30,000 for students serving as cultural ambassadors while studying abroad.

Your existing financial aid

If you currently receive non-loan financial aid, you may not need to look for additional study-abroad funding. 

You’re still technically enrolled at your home university when you study abroad for a semester or two. As a result, you can often use the scholarships you’ve already been awarded for your overseas studies. The same is true for any grant money you receive.

Eligibility varies based on your scholarship or grant requirements, as well as your school’s policies. Your financial aid office can help you figure out if using your existing aid is a viable option. 

Tip

Some countries—Australia, for example—let international students work part-time. If your financial aid or study abroad loans don’t leave much financial breathing room, a part-time job can help you earn spending money while overseas.

If an outside organization (like a nonprofit or local business) sponsors your scholarship or grant, reach out to its award committee, too. Not only will the committee want to stay abreast of your educational development, it can let you know if any rules or regulations preclude you from using your funds abroad.

Can I use student loans to earn a degree from an international school?

The Department of Education allows the use of federal loans to obtain a degree from an international school. The same stipulations apply if you only study for a semester or a year abroad: The school must be eligible to participate in federal student aid programs.

Aside from eligibility, the major consideration is whether your federal loans will be enough to pay the full cost of earning an international degree.

If not, consider private study abroad loans. Comparing private student loan terms and requirements can help you find a lender that matches your needs. 

Read More

Learn about the different uses for student loans.

FAQ

Who offers study abroad student loans?

Various entities—including private financial institutions, lenders, nonprofit organizations, foundations, and government-sponsored programs—extend study abroad loans to help students finance their education in foreign countries. 

Well-known lenders include College Ave, Ascent, and Sallie Mae. Most educational institutions also have financial aid offices that provide eligible students with scholarships, grants, and loans to support their study abroad plans.

Do study abroad student loans cost more?

The cost of study abroad student loans can vary based on several factors, including your lender, study abroad program, and loan terms. Here are considerations to bear in mind:

• Interest rates: Private student loans can have higher interest rates than federal student loans.
• Additional costs: Study abroad student loans might involve origination fees and other upfront expenses, which can add to the overall loan cost.
• Repayment terms: Longer repayment periods result in higher interest accruing over time, affecting the total amount you repay.
• Exchange rate fluctuations: Currency exchange rate fluctuations can affect tuition, fees, and other expenses while studying abroad, resulting in the original loan amount you requested being insufficient. 
• Comprehensive program cost: The overall cost of your study abroad program, including tuition, travel, accommodation, and living expenses, is significant in determining the total borrowed amount and eventual repayment.

Do I repay education loans to study abroad the same way as traditional student loans?

In most cases, you repay study abroad student loans like traditional student loans. The repayment process and terms often follow the same guidelines as other student loans, regardless of whether you use them to attend a domestic or overseas institution. For instance, grace periods are typical for both loans, offering students time after graduation or leaving school before beginning loan repayments.

However, the payment terms and options can vary based on factors such as the type of loan, the lender, and your personal circumstances.

Recap of student loans for study abroad

Lender	Best for	LendEDU rating
Department of Education	Federal student loans	Not rated
College Ave	Private student loans	5/5
Sallie Mae	Cosigners	4.8/5
Ascent	No cosigners	4.4/5