Exploring the Ins and Outs of Study Abroad Financial Aid
This article includes a brief overview of financial aid for undergrads. If you're currently on financial aid, have met with your financial aid officer, and your financial aid for the time you plan to spend abroad is all straightened out, then you can skip this section. I'm providing this information for those of you out there who may need to pursue some alternative financial avenues because your current financial aid plan doesn't quite work for a semester or year abroad.
Looking at the legalities of funding
Most U.S. institutions dictate that for financial aid to transfer to a study abroad program, you must carry and receive credit toward your degree for at least a half-time courseload at the abroad university. Study abroad must, in some way, be academically pertinent and not merely an enrichment experience or vacation.
Universities may also impose eligibility restrictions, particularly with institutional aid. As far as financial aid is concerned, many students are able to take their government aid (state and federal funding, including Pell Grants and Stafford and PLUS loans) abroad with them. Merit scholarships also can be used abroad, although they must be used for programs sponsored by U.S. institutions. If the school grants a student credit for a proposed study abroad program, and the student meets requirements for federal aid, then the school is not permitted to deny federal aid to the student just because he or she is going abroad.
The Higher Education Act (HEA) of 1992 mandates that a student can receive financial aid for study abroad when the student is enrolled in a program approved by the home university. Moreover, the student is eligible to receive "grants, loans, or work assistance without regard to whether the study abroad program is required as a part of the student's degree."
Understanding the types of financial aid
Education in the U.S. is expensive. In fact, few students can afford to pay for college without some sort of educational financing plan. Recent statistics show that two-thirds of undergraduate students graduate with some debt, and the average federal student loan debt is $16,888 (Stafford and Perkins loans). When you include PLUS Loans in the total, the average cumulative debt incurred is $19,785.
The reality is that grants, scholarships, work-study, and other forms of gift aid (aid that doesn't need to be repaid) just cannot completely cover the full cost of a college education. Education loans come in three major categories: student loans, parent loans, and private loans. The federal education loan program is most attractive because of lower interest rates and flexible repayment plans.
The FinAid Web site (www.FinAid.org) provides numerous calculators that can help you understand your loan options. The calculators offer:
- Estimates of monthly loan payments and the amount of debt you can afford to repay
- Analysis of the cost of capitalizing the interest
- Tools for comparing loan costs
Here's a breakdown of the types of aid out there:
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