The cost of attending college or university has been on a
steady increase the past decade, forcing many students 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.
 | |
|
Although you can apply to a study abroad scholarships and
grants to offset costs, they may not necessarily be enough to cover everything.
The biggest questions we'll be answering in this article are
whether or not your college loans an be applied to studying abroad? If not,
what do you have to do to keep them rolling if you put them on pause? Secondly,
can you get a loan to study abroad?
Can You Get a Loan to Study Abroad?
Yes, you can absolutely get a study abroad loan. Although
you can apply to a study abroad scholarships and grants to offset costs, they
may not necessarily be enough to cover everything. If you are planning a study
abroad experience that exceeds available funding, it'll be helpful to look into
study abroad loans.
Loans can help with expenses related to tuition and books,
housing and board, and even cultural experiences. There are two different types
of study abroad loans:
Federal Students Loans
Private Student Loans
Student loans can be confusing, so it's very important to
conduct read all the fine print and understand eligibility, the requirements,
and what exactly you're signing up for.
Generally speaking, to be approved for a student loan, the
school you're attending abroad needs to be accredited. Now this sounds easy,
but the US Department of Education doesn't provide a list of accredited schools
outside of the US. Instead, they rely on other agencies to approve and accredit
international institutions. An applicant should be able to demonstrate that the
college or university is in good standing and reputable.
Your college study abroad office and financial aid office
should be able to help you with both identifying relevant post secondary
institutions and the application process.
It's also important that the applicant (you) be in good
financial standing. Study abroad loans can be more competitive than general
school loans, so it's even more important to demonstrate that you have good
credit.
It might be required that you have a co-signer on the loan.
If you're doing this research well before your study abroad program (say, a
year or two out), it might be a good idea to apply for a student credit card
(and pay off everything on time!) to help build your credit if you haven't
already.
Loans Are Treated
Differently Depending on Your Program Type
The student loan versus the study abroad loan process is
nuanced.
Basically, most institutions and loan agencies treat the two
types of loans separately and have separate processes for each one. The
applications are different, the repayment schedules are different, and often
the qualifications are different. Therefore, one of the easiest first steps to
take is to start with your own institution to figure out if you'll need a study
abroad student loan or if you can get away with a normal student loan.
Many schools are able to apply broader student loans to
study abroad experiences if study abroad experience is through that school. For
example, if you attend the University of Michigan, you will probably be able to
apply your student loan funds to a University of Michigan study abroad program
-- i.e. one of their faculty-led programs or a direct exchange with a partner
university abroad.
While it may sound limiting, many schools have extensive
study abroad programming, even some of the smaller liberal arts schools are
offering programs in multiple countries. Your first step should be to meet with
your study abroad and financial aid offices and see what your options are.
Federal Student Loans
Federal Student Aid, sponsored by the Department of
Education, provides a helpful list of schools that are eligible to participate
in federal loan programs. Here you can search programs and schools and learn
more about the application process and what is required of students and their
institutions. For students already receiving federal aid for college or
university, you will be familiar with the standard FAFSA forms (Free
Application for Federal Student Aid) that need to be filled out every year.
The key to successful application process is starting early
(even as much as a year in advance), staying organized, and contacting your
university, the FAFSA hotline, or your international institution when you have
questions. You're probably not the first person to be applying for a loan at
your chosen international school, so be sure to reach out and clarify any
questions that might arise.
According to Federal Student Aid, there are several types of
loans that you might apply for:
A federal student loan from the William D. Ford Federal
Direct Loan (Direct Loan) Program.
A Direct Subsidized Loan or Direct Unsubsidized Loan.
Direct Unsubsidized Loans and Direct PLUS Loans available to
graduate students.
Your parent also might be able to borrow on your behalf; he
or she should ask about getting a Direct PLUS Loan for parents.
International schools do not participate in the U.S.
Department of Education's grant programs, so you will not be able to obtain a
Federal Pell Grant to get your degree at an international school.
Amounts for federal loans vary between $5,500 and $20,500
(definitely enough to cover much of the cost of study abroad). The amount will
be determined by a large number of factors, including how long you intend to
study internationally.
If you're applying for federal loans for the first time you
will be required to attend entrance counseling, which explains the loan process
in detail and provides financial planning tools. Repaying a loan after your Study Loan Abroad
experience is just like repaying it for an American school. Student aid
has some helpful steps to understanding the process. For more questions,
consult this helpful myths and realities page that addresses specific concerns
of students on federal financial aid hoping to study abroad.
Source: https://abroadstudyloan.wordpress.com/2016/07/25/what-you-need-to-know-about-study-abroad-financial-aid/
