Financing a Study Abroad Experience/ July 22nd, 2013
With a rising number of students studying abroad, more of them are asking, "How do I pay for this?" Some families mistakenly believe they need an overstuffed bank account to give their college-age children this opportunity. In fact, grants, financial aid, and loans are available to help pay for the trip—and learning experience—of a lifetime. The 2012 Open Doors Report on International Educational Exchange found that, for the 2011-2012 academic year, the number of international students at colleges and universities in the U.S. increased by 6%, while U.S. students studying abroad increased by 1% compared with the year before. Dr. Allan Goodman, president and CEO of the Institute of International Education (IIE), New York, the publisher of the Open Doors Report, believes that study abroad is essential for young people. And students can find ways to make it affordable. "The experience is life-transforming," he says, "and the need for globally knowledgeable college graduates is so important to our nation that we cannot and should not allow economic concerns prevent young people from experiencing international education." Goodman points to the many funding opportunities that can help students pay for study abroad programs, including scholarships, grants, fellowships, and loans. A number of study abroad financial planning resources are available online and on college campuses. Students should first consult with a study abroad adviser, if available, at their home university. International study offices are becoming standard on most campuses. Advisers can answer questions and direct students to information about financing the experience. Students should also investigate other options available through organizations like IIE. IIE has an informational website and also administers numerous scholarship and grant programs.
Plan AheadAnother oft-repeated tip: Plan ahead. Twelve to 18 months in advance is the recommended time to begin planning, as this allows students to gather the information they need to calculate the total cost involved, fill out scholarship or loan applications, and apply for passports or visas if necessary.
Study abroad is the opportunity of a lifetime; you can find ways to make it affordable.Calculations of total cost include more than just tuition fees at a foreign institution. Factor in the price of room and board, books, travel to and from the study destination including holiday trips home, and spending money for sightseeing, recreation, and additional travel. After all, the opportunity to study in a different country should include education outside of the classroom. Once your family has estimated the total cost of a study abroad experience, consider having your child apply for a scholarship, grant, or financial aid. Financial aid advisers recommend that students investigate rules and requirements for their home institution; study abroad financial aid criteria varies. For example, if a student benefits from in-state tuition, that benefit might not carry over to an international institution. This was the case with Mike, a junior from Madison, Wis., attending the University of Wisconsin-Madison, who is now fulfilling his dream of spending a year studying in Rome at John Cabot University. According to Mike's mother Ann, he decided rather late to apply and, because his in-state tuition at Wisconsin did not cover the cost of his studies in Italy, he needed to apply for scholarships. Yet by that time most scholarship opportunities were no longer available. "The blow to us was that the tuition [to John Cabot] was $10,000 more per year than his Wisconsin tuition, so we are covering costs through savings, loans, and sending him spending money as we can," says Ann. "Mike's had to learn that although some study abroad kids have unlimited resources, he's on a shoestring. Needless to say, he is having an awesome adventure and getting to know Rome itself, as well as doing quite a bit of traveling all around Europe."
Apply for loans, save moneyAs with scholarships and grants, loans can ease the cost of study abroad. With loans in particular, it's wise to shop around, read the fine print, and calculate repayment options, according to Sean Lennon, managing director and co-founder of The Education Abroad Network, Chicago. In many cases, students need to pay back loans for study abroad immediately after completing their degrees.
With loans in particular, it is wise to shop around, read the fine print, and calculate repayment options.And then there's the option, although a challenging one, for full-time students to save the money they will need to finance a study abroad experience. Paula, a University of Minnesota student in Minneapolis, paid for her first two years of college through a SELF loan, a state of Minnesota educational loan. However, she decided not to apply for any financial aid to fund her full year of study in Spain; instead she worked hard at several campus jobs to save the money she needed. Industrious and well aware of the challenges this approach entails, Paula has this to offer: "My advice would be to save. Work and save because you're going to spend more than you think, and it's not fun to be stressed about money while you're abroad. I also recommend getting an idea about how many [other] places you want to travel to and budgeting for that as well," says Paula. As her year in Spain winds down and she prepares to go back to Minnesota as a senior she adds, "I wish I would have buckled down and worked a few more hours before I left. There's so much more I'd like to have afforded to do." A few other tips for minimizing the cost of a study abroad experience include searching for programs located in smaller, less expensive cities. Alternative housing options such as local apartments, host family homes, or budget dorms also can result in savings. The IIE website even suggests students ask locals about shopping and eating bargains, and recommends exchanging money only as needed to minimize transaction costs. A good financial plan and a solid budget allow students to enjoy their study abroad experience without having to worry about money.
You may not want to think about what could go wrong during a study abroad experience, but it's important to be prepared.If you're trying to finance a study abroad experience and already have tapped scholarships, federal aid, and other loan programs, contact the professionals at your credit union. They can explain financing options to make your child's dream a reality, for example setting up a special savings account for this endeavor or tapping home equity.