Financial Aid & Study Abroad: Basic Facts for Students

The Higher Education Act (HEA) of 1992 mandated that a student can receive financial aid for study abroad if the student is enrolled in a program approved by the home institution. Moreover, the student would be 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.”

What types of financial aid are available?

Federal and state governments, foundations, private and public organizations are primary sources of financial aid. Be sure to check with your financial aid director, study abroad advisor or bursar about whether your financial aid can apply to study abroad. Note the following types of financial aid:

Federal Aid

Federal aid can consist of loans, scholarships, or work-study.


  • The Federal Direct or the Guaranteed William D. Ford Loan is also called a Direct Subsidized Loan. It is available to students who demonstrate need. Federal government pays interest on the loans as long as the student is enrolled half-time. Repayment begins after you graduate, leave school, or drop below half time.
  • The Federal Direct or Guaranteed William D. Ford loan can also be an Unsubsidized Loan. It is available to students regardless of need but interest is charged to the students while in school. A student may choose to make the interest-only payments on the unsubsidized loan. or allow the interest to be added to the loan principal and then pay both principal and interest after leaving school.
  • Federal Graduate PLUS loans are available to Graduate/Professional students. These loans are made via the Direct loan program. Students are responsible for all interest charges.


  • The National Security Education Program (NSEP) and the Fulbright Program funded by the Federal government have grants and fellowships for graduate students for study and research overseas. Students should be aware that government organizations in other countries such as the German Academic Exchange Service (DAAD) offer funding opportunities.

State Aid

This aid can be need-based or it can be merit based. These include grants or loans but may include tuition waivers or other types of aid.

Institutional Aid

This aid is funded by the student’s home institution. These scholarships can be based either on need or on merit. Institutional aid can come from a variety of sources, which includes alumni, faculty, endowments, etc. Some aid can be specified for overseas study but other scholarships can be restricted to the campus, state, or for domestic programs, etc.

If you are planning to attend an overseas study program sponsored by another institution, the home institution through a written agreement between the schools might allow you to use your financial aid. But students should realize that policies vary among institutions of higher education and therefore, should check with their study abroad advisors and financial aid administrators regarding enrollments with another institution.