Financial Aid & Study Abroad: Basic Facts for Administrators

by Nancy Stubbs

The lack of adequate funding for education abroad ought not to be a problem, apart from the national problem about how to guarantee equal access for all students to all of U.S. higher education. The most important duty of the education abroad administrator is to make study abroad a viable alternative. Through knowledge, communication, and networking, regular and alternate sources of financial aid can be found. The time involved may seem daunting, but the rewards to students make the effort worthwhile.

Prohibitive costs—real or imagined—are one reason students do not consider education abroad when planning their undergraduate careers. The bad news is that study abroad can be much more expensive than initial interest might suggest. The good news is that more and more students can use campus financial aid programs to help pay for the experience. Also, the proliferation of education abroad opportunities over the past ten years makes it easier for students to shop around and find programs that fit their budgets.

Some students may not realize that financial aid resources can be used to make an overseas experience affordable. Others may think there are endless scholarships out there waiting to be tapped for that experience in England. The education abroad adviser is increasingly called upon both to provide access to affordable programs and to be an expert on how students can obtain financial assistance.

At a minimum you need to be able to answer the following questions:

• What is financial aid? How do students qualify for it?
• Can financial aid be used for study abroad? For other forms of education abroad?
• What must my campus do to help students use aid for education abroad?
• Are there funds specifically for education abroad? Can I raise money for this purpose?
• How can I help my students find inexpensive programs?
• Am I willing to assist students in investigating scholarship opportunities for study and research overseas?

This resource will provide ideas about how to learn about financial aid, make it available to students, develop aid specifically for education abroad, and help students shop for the best education abroad bargains.

What Is Financial Aid?

Sources of Financial Aid

Financial aid can be broadly defined as any help that does not originate with the student or his or her family. Financial aid comes from federal and state governments; institutions of higher education; foundations; ethnic groups, clubs, religious groups, and associations; and private and public corporations.

Federal and state government aid is:

• funded by taxpayer dollars, or sometimes by revenue-raising devices like lotteries
• most often need-based (i.e., the student must demonstrate financial need to qualify), but can also be merit-based (the student must show some special quality such as superior academic ability or exceptional skill in art or athletics)
• might be targeted to special groups (underrepresented or other nontraditional students, or students entering certain professions such as teaching)
• in the form of grants, scholarships, loans, and/or work-study

Federal financial aid is governed by Chapter IV of the Higher Education Act of 1965, which is reviewed and reauthorized every five years by Congress. In the 1992 reauthorization, language was inserted stating that it is legal to use federal aid for study abroad if the credit earned by the student is approved by the home institution.

Institutional aid is:

• any aid funded by the student's educational institution
• based either on need or merit, or both
• most often awarded as a scholarship or as reduced tuition
• sometimes targeted at special groups (ethnic minorities, students from other areas of the country, certain majors, first-time college students, etc.)
• awarded only to students enrolled at the institution, which often creates a barrier for study abroad students
• sometimes restricted for use only on the home campus or in the home state

Because of the latter two requirements, students who are heavily subsidized by institutional scholarships often cannot afford to study abroad, even if the program costs less than a year at the home campus. This unfortunate fact sometimes clashes with an institution's stated goal of providing international experiences to all students. On more enlightened campuses, all financial aid is usable for education abroad as an entitlement of enrollment in good standing.

Private aid is:

• aid whose source is neither governmental nor institutional
• usually available as scholarships or loans
• most often awarded directly to the student, who then uses it to attend the institution of his or her choice
• sometimes includes requirements that it be used in specific colleges or geographic regions, making it difficult to use while overseas

Private aid has the most diverse eligibility requirements and sources of funding.

Types of Aid

There are several types of aid:

• grants and scholarships,
• loans, and
• work/study or subsidized work.

Grants and scholarships are most desirable because they do not have to be repaid. Grants are need-based; scholarships are generally merit-based and are often awarded to people who demonstrate a special ability or belong to a specific group. Most students receiving grants must meet some minimum standard of academic progress (for example, enrolling at least half-time during the term the grant is used, maintaining a minimum grade point average). Scholarship awardees must sometimes undertake specific activities (for example, competing in a sport or making presentations or appearances for the scholarship sponsor).

Loans generally have low or fixed interest rates with long repayment periods. Often repayment does not commence until after graduation. Interest on some loans is paid by the government while the student is in school. The student may not need an established credit rating; many government student loan programs do not require a credit check or a cosigner. Many loan funds are self-renewing, meaning that the money repaid by former students is lent to new students. Loans are also routinely made available to students' parents or guardians, though at less favorable terms and with a required credit check.

Loans have become a major part of the standard financial aid package. This trend worries financial aid administrators because of concern that students are borrowing too heavily and will graduate with insupportable debts. Education abroad advisers must consider whether borrowing heavily to study abroad is in the student's best interest. At the very least, advisers must help students understand the implications of borrowing large sums of money.

Work-study, or subsidized work, is based on the premise that subsidizing student salaries allows an employer to hire more students. Most work-study programs are government-funded and require a student to show financial need.

Work-study can be used while studying abroad if program administrators develop an appropriate process for employing and supervising overseas work. Students may work for the study abroad program or may be placed with nonprofit or governmental agencies. Since the extra effort and paperwork required to comply with federal or state regulations for hiring, supervising, and paying work/study students can be formidable, these opportunities are usually quite limited.

Where Can I Learn More About the Aid Available on My Campus?

Most students receive a combination of governmental and institutional aid, and no two students are likely to receive the same package. You should become familiar with the kinds and sources of aid available at your institution. If you need a basic primer on federal government programs, ask your financial aid office for a copy of The Student Guide (published by the U.S. Department of Education). This booklet, which is updated every year, defines federal aid programs and provides information on eligibility requirements, responsibilities of the student and the institution, and more.

Your financial aid office is also the best source of information about institutional aid and the bewildering variety of private aid available to college students. The office probably publishes a brochure or booklet that outlines the types of institutional aid available to students. Funds available through academic departments may be listed; if they are not, see if there is a central source of listings, perhaps on a Web page.

Many universities now provide a search service for students who want to see if they can qualify for private aid. This is usually a low-cost alternative to the many commercial scholarship search services. If your institution does this, find out how it works so you can share the information with education abroad students.

What Financial Aid Can Be Used for Study Abroad?

The ideal answer is everything the student would normally receive, plus any special study abroad scholarships that can be found. Using all types of federal financial aid for study abroad is perfectly legal as long as the student is eligible and your institution has approved the courses taken abroad for credit (more about that later). Many states pattern their financial aid rules and regulations on federal statutes and regulations, so that aid can also be used for study abroad.

Institutional and private aid may or may not be available for study abroad, depending on the restrictions placed on the award. This is a problem for students attending private schools where large scholarships are awarded from endowment funds. All institutional and private aid should be made equally available for overseas study as long as students are participating in legitimate approved programs and receiving credit toward their degrees. Denying this support to needy students sacrifices the principle of equal access to all academic opportunities.

What About Other Kinds of Education Abroad?

Most undergraduate aid is geared toward helping students make progress toward their degrees-for example, earning credit. If the overseas activity involves work, internships, field experience, or volunteer activities, most federal, state, or institutional aid cannot be used.

One exception is if the activity does generate credit. If internships or field experiences are allowed for credit on your campus, find out how that credit is arranged and see if international experiences can be added to the list. The other exception is private aid designed to encourage an international experience even if it does not include formal study. A check of one of the funding books for international scholarships includes grants for travel, social work, undergraduate research, the exploration of architectural trends in major world cities, and unpaid work at various ecological or biological research stations.

Common Excuses for Not Allowing Aid to Be Used Abroad

"Federal and state regulations allow aid to be used only on this campus."

Federal law says that students cannot be denied aid just because they study abroad as long as coursework is approved for academic credit by the home institution. Federal regulations provide for the use of agreements to contract out a portion of the student's education, thus allowing students to study abroad or even to study at a different U.S. institution.

"Our campus is tuition-driven, so aid must be used to support this university, not some campus in another country."

"We don't have enough aid for students who are on campus, let alone for those who study abroad."

"It's too hard to track students who leave campus. Giving them aid would cause problems during an audit."

"It takes too much extra work to handle study abroad students."

It is not in your institution's financial or academic interests to deny aid for study abroad. Students and parents are increasingly aware that federal aid can be used to study abroad and are far less likely to accept excuses. As the study abroad administrator, you are responsible for helping your institution see this. You need to educate financial aid administrators and help develop proper standards and controls to ensure that aid is properly awarded, disbursed, and tracked. Education abroad administrators can and must be involved in this process, both to help students and to help financial aid officers fulfill their legal obligations.

How Is Awarding Aid for Study Abroad More Difficult?

Three financial aid processes become more complicated when students study abroad-qualifying for financial aid, having it disbursed, and applying for it overseas.

Qualifying

• Students must be enrolled in a degree program to receive federal and most state aid.
• Students must beenrolled for a certain number of credit hours during the semesters they receive aid.
• Study abroad credit has to be approved for credit by the home institution before the student leaves. This must be defined on each campus, and an appropriate process devised.
• The 1992 reauthorization of the Higher Education Act allows the "reasonable costs of study abroad" to be used to determine how much aid a student should receive. Students attending low-cost institutions can qualify for more aid if the cost of study abroad is higher.
• Study abroad budgets must be devised, and the cost of each study abroad program must be documented.
• Data the student submits on aid applications or other forms must be verified, sometimes with source documents like tax records and sometimes by verification from the study abroad office. This may occur after the student has left for the study abroad site.

Having Aid Disbursed

• Students must sign award notices, loan promissory notes, and other official forms.
• Federal and most state aid cannot be disbursed more than ten days before the beginning of the term.
• Federal and state grants and some kinds of loans (Direct Loans, Perkins Loans, etc.) are applied to the student's account at the home institution.
• Some other loans (Federal Family Loans) and private scholarships are disbursed in check form. It is possible to designate a power of attorney to pick up checks and to sign them, including federal loan checks.
• Refunds must be disbursed after home campus fees are paid. Some institutions electronically deposit refunds in students' accounts.
• There are federal rules governing whether aid must be repaid if students withdraw in a certain period of time.
• Applying for Aid for the Next Semester or Year
• Students have to reapply for federal/state aid each year.
• Satisfactory academic credit must be shown each term, normally by getting passing grades for a full-time load of credit.
• Award notices and other documents must be sent to students for their signatures, or must go to a person with a valid power-of-attorney.
• It may be necessary to allow forms and other documents to arrive after normal deadlines to allow for international mail delays.

How Can You Help to Make Financial Aid Available?

Three words come to mind–knowledge, communication, and cooperation:

You must also be a determined and resourceful activist, lobbyist, and proponent for using current funds and for finding new funds. Without your active leadership, nothing new is likely to happen.

Where do you begin? First, accept the fact that financial aid for study abroad will probably involve more work for you and your office, as well as for several other administrative offices on the campus. The extra work is generated by the need to create new procedures. The following questions will help you define where new processes or procedures are needed on your campus:

• Who decides if the study abroad program provides credit acceptable to the home institution? What procedures and forms must be developed?
• How are study abroad students identified and rostered on the aid-giving campus? (Many state loan agencies that monitor the use of student loans now have direct access to campus computer records.)
• Who determines the budget for a study abroad program?
• What if the study abroad program begins earlier or later than the date federal aid can be legally disbursed?
• How are refunds disbursed to students? Should refunds be paid to another institution if it administers the program?
• Who shows students how to get powers-of-attorney and how to use them for loan checks and refunds?
• Who notifies the financial aid office if the student withdraws?
• Who monitors academic progress and records grades and hours once the program is finished?
• What should be done if the grades are not received from abroad before the beginning of the next academic term?
• Who communicates with the student and/or parents if there are financial aid problems while the student is away?
• How does the student get aid applications for the next academic period? Should application deadlines be extended for study abroad students?
• How will study abroad payment schedules be altered to allow students to receive their financial aid before paying?
• How must computer systems be altered to allow for the special needs of study abroad students ?
• Who is going to pay for all of this and do the extra work?

Answering these questions will take time, concentration, and good communication with the appropriate departments.

The questions outlined above can be even more complex when the student wishes to go on a program sponsored by another institution. There is a way to contract out part of a student's education and still give that student federal aid. Consortial or contractual agreements allow students studying for a limited time at another college or university to use federal aid. While a contractual agreement will solve some of the problems mentioned above, the agreement will also require another layer of procedure.

One of the best resources for establishing these new procedures is networking. Contact other institutions and see how they have solved similar problems. Call nearby institutions that run study abroad programs. Contact NAFSA or CIEE for a list of institutions with large education abroad programs, or go to regional or national NAFSA or CIEE conferences and meet colleagues. Remember: each campus has individualized systems, so there is never one perfect way to award aid. Even the best advice will have to be molded around your institution's policies, which will require knowledge, communication, cooperation, and skill on your part.

Outside Funding and Scholarships

There is very little in the way of private funding for undergraduate education abroad. The financial aid discussed above can be applied to the costs of studying abroad, as part of Federal support for undergraduate study, but does not specifically represent a Federal commitment to support overseas study. Indeed the faltering beginnings of the National Security Education Program (NSEP) represents the only such Federal commitment of this sort, and its future is not guaranteed. This lack of broad-based funding often limits participation in education abroad to those who can afford it through parental and/or institutional support. Even with greater access to federal and state aid, there are numerous examples of students who do not qualify for need-based financial aid and cannot find an extra $1,000 to $4,000 to participate in a study abroad program.

Because sources for extra funding are limited, the education abroad office must consider three primary strategies: (1) identifying those funding sources which do exist and assisting students to secure them; (2) developing additional funding sources for your campus; and (3) finding and utilizing study abroad programs whose costs are approximately the same as costs at the home campus.

Identifying Funding Sources

Build a modest library of funding books that include scholarships for undergraduate study abroad. Many of the basic international funding books include a few entries for undergraduates. Make these available to students in the study abroad office, or perhaps ask the campus library to stock them in the reference section.

Have you been surfing the web? A good general resource for financial aid is The Financial Aid Information Page. This free resource on financial aid for higher education lists information about aid, advice about finding aid, and even has a special section for financial aid for study abroad. A different resource is the University of Minnesota's Online Study Abroad Directory, with over 200 entries. These new resources are a good supplement to the printed information that has been available for many years.

Other sources of funding are the general grants, loans, or fellowships awarded by private organizations, businesses, churches, and others. Scholarships that can often be used for study abroad may be awarded on the basis of personal attributes (ethnic or religious background, parents' field of employment, children of veterans, descendants of immigrants from specific countries), or on academic focus, major, or career path. The challenge for you and for your students is to locate appropriate and relevant funding.

To find this type of aid, students do not necessarily have to pay the sometimes high fees charged by commercial search services. Most financial aid offices or campus libraries have resource books that list these types of scholarships. Many financial aid offices offer their own search service, which costs less than commercial companies. Students can do their own free search using a web site called fastWeb (Financial Aid Search Through the Web). This site, provided by the Financial Aid Information page and Student Services Inc., allows students to search a database with more than 180,000 scholarships and loans.

Many cities have branches of international friendship organizations, such as Alliance Française, Goethe Clubs, the Dante Alighieri Society, or the League of United Latin American Citizens. Many such organizations have modest programs that aid students who study or do research in their country of interest. Check your area to identify these organizations and to see if they have scholarship programs (or would like to begin a program).

Rotary International has a yearly competition for students engaged in study or research abroad. The Rotary International Scholarship is a well-known example of support for undergraduates and graduates going abroad. Contact your local Rotary Club to see how students can apply for the scholarships. Ask those local branches if they would consider creating a special award for local high school graduates who study abroad.

The Council on International Educational Exchange (CIEE) offers a limited number of travel grants funded out of its sale of the International Student Identity Card. These awards are specifically for students engaged in study or research in third world countries, where the cost of round-trip transportation is often very high. Students can qualify for these travel grants by (a) participating in a CIEE program, or (b) being enrolled in program sponsored by a CIEE member institution, or (c) being from a CIEE member institution. CIEE also offers small scholarships for minority students from the Robert Bailey Fund. Certain other universities (for example, Syracuse) and agencies (for example, AIFS) offer need- and merit-based scholarships for students participating in programs they themselves sponsor.

However, assisting your students in locating viable sources is perhaps the easier half of the challenge. What remains is the need to work with them to make effective and potentially successful applications, knowing that they will be competing with similar students from other institutions. Competing for scholarship support can be very time-consuming, and even plenty of hard work does not guarantee success. Thus, before your office becomes involved in advising students about scholarship opportunities or administering such scholarship competitions, it is worth spending some time thinking through what is involved.

Administering scholarships for study and research abroad can be rewarding to an office, can bring it into contact with students and faculty who might otherwise not come within its scope, and can bring a certain degree of prestige to the office, if the institution takes seriously the benefits of having scholarship winners from its campus.

Although there are indeed students who can, with almost minimal help, turn in applications that have "winner" stamped on them, experienced scholarship advisers know that most scholarship applicants, successful and otherwise, need advising-some to a surprising extent. Does your office have the resources to provide this kind of support? If not, you will need to try to convince your institution that additional resources are required.

It is no less true for scholarship administration than it is for study abroad in general that faculty support and involvement is often very necessary in order to produce a successful process. This can take a number of possible forms:

• forwarding names of students they regard as strong applicants for particular scholarships-something your office may have to elicit.
• advising students on award-selection criteria and helping them prepare their applications. For example, referring students to faculty who might know which physics departments in France are the most appropriate in certain fields.
• serving on or chairing interview panels, since many scholarships require an on-campus review process. It is very important to decide on the intent of any campus interview and make this purpose clear both to the applicants and to those on the committee. Accordingly, ask faculty to serve who can best meet the objective of the interview.
• writing strong letters of recommendation and support, which is often the sine qua non for student success.

Equally important is securing an unequivocal institutional commitment to having students win prestigious awards–an honor that not only assists them economically but also augments their academic reputation. Such proactive commitment encourages the campus community to provide students with the guidance they need at various stages of the application process.

Most institutions engage in significant outreach and publicity on behalf of education abroad. Information about scholarships could naturally accompany education abroad promotion. But most offices find they need to develop a whole new strategy to encourage students to pursue scholarships.

Are your students realistically strong candidates for national scholarship competitions? This, of course involves both knowing which scholarships are suitable and feasible for your students, the selection processes, and knowing your students well enough to be able to advise them individually. Your office strategy must also take into account how much effort you can put into getting more applicants, as opposed to working more closely with fewer applicants. Some scholarships may not be administered by the education abroad office itself, which can nevertheless act as an advocate.

Fundraising

Consider raising funds to create an education abroad scholarship fund. Begin by contacting your campus development office to see if an appeal can be worked into an annual fund drive-perhaps targeting alumni who have studied abroad. Working with the development office allows you to get expert advice about raising money plus access to mailing lists, postage, the alumni magazine or newsletter, and the local community. Your pitch should be that academically qualified and interested students should not be denied the educational and career advantages of an overseas experience because they lack money.

Some education abroad offices set up program budgets that generate some funding for students on financial aid. Others charge an administrative fee or surcharge to all students studying abroad, some or all of which is put into scholarship funds. If your office administers programs of its own, or charges students who study abroad a fee for services, consider collecting a small sum per student to fund scholarships.

At the University of Texas at Austin, the education abroad office worked with the student government to add a nominal amount to normal student fees, thereby generating a large pool of money to support overseas study. Other institutions have tried this, and some now have successful study abroad scholarship programs funded by student fees.

Finally, examine your institution's policies for charging study abroad students tuition or other fees. Does your campus make money on study abroad because students are charged normal tuition for the privilege of being enrolled while abroad or for having credit transferred back? Is that tuition then used to pay for the students' program costs and perhaps to fund the education abroad office, or is there a portion that reverts to the university's general fund?

If the latter is the case, build a coalition of students, faculty, and perhaps alumni who are interested in seeing some of that money used to fund scholarships for education abroad. This would be an equitable way to, for instance, help offset the loss of other institutional funds that cannot be used for study abroad. If your institution encourages students to study abroad, this is another way for your administration to put its money where its mouth is.

Finding Low-Cost Programs

The first thing one must do is define "low cost." What is inexpensive for a student at a major private university could be prohibitive for a student at a community college. Ask the following questions:

• What is the total cost for a year's education on your campus? Is there differential tuition for residents and nonresidents? Higher cost for living in town than in dorms?
• What is the actual cost of study abroad programs you administer? Don't forget roundtrip airfare, visa costs, the cost of communicating with people at home, shipping costs, housing, mandatory field trips, and so on.
• What is the actual cost of other study abroad programs that your students may use?

It never works to compare apples with oranges, but many students do just that. They fail to think of the total cost of a study abroad program. Of course, most students probably don't have any idea what they actually spend for a year on your campus, either. As the education abroad administrator, it is your job to help students assess the realistic cost of study abroad and to compare that to the realistic cost of study on your campus.

It is impossible to assess costs for all possible programs–the 1996–97 IIE's Academic Year Abroad, for instance, has 4,200 entries. It is possible to target programs used most often by your students and to ask their administrators to provide a breakdown based on your cost categories. This will allow you and your students to compare program costs intelligently.

When you can compare the cost of study abroad to the cost of your students' education, you can search for low-cost programs. Where to look? Start with the list of Rock-Bottom Study Abroad programs, conceived by Jon Heise and Linda McGowan at East Carolina University. This list, which defines what low-cost means and is updated on a regular basis, is available through many study abroad web sites.

You should also put your networking skills together to find low-cost programs for your students. Ask colleagues at similar institutions which programs they use. Watch the study abroad e-mail networks for discussions of inexpensive programs, or ask the networks for feedback on this topic.

You can also ask your faculty for ideas about low-cost programs, but you might find them more interested in issues of academic quality than in cost. Some feel there is a strict correlation between level of quality and cost, so inexpensive programs, they reason, must be academically suspect. Others have had positive experiences with low-cost programs and know that they provide an excellent education for students. If you don't know how your faculty feel about this issue, begin to talk about it, or you may find that you are helping students find programs that are deemed uncreditworthy by academic departments.

Why should you care how much programs cost? If you believe that education abroad is a vital part of an undergraduate's education, you must ensure that students not only have access to quality programs, but that they are programs the average student on your campus can afford. No amount of access to financial aid will convince some students that study abroad is affordable. You must do it for them.