Saturday, November 22, 2014
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Financing a Study Abroad Experience



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 Ahead

Another 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.

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.

Study abroad is the opportunity of a lifetime; you can find ways to make it affordable.

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 money

As 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.

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."

With loans in particular, it is wise to shop around, read the fine print, and calculate repayment options.

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.

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.

Research rules about health/medical coverage

It's tempting to try not to think about what could go wrong during a study abroad experience, but it's important to be prepared. Potential health issues vary greatly from country to country, and certain universities require students to have additional immunizations—depending on where they're studying—before they arrive. Check with your health-insurance provider to find out what is covered while studying abroad and how students can file a claim.

The terms of medical coverage for international study vary across college campuses. At Ithaca College in Ithaca, N.Y., for example, all students going abroad on their own or with affiliated programs are enrolled in a comprehensive health-insurance plan designed for the international experience.

"This insurance program provides exceptional levels of coverage, as well as 24/7 telephone and online support worldwide. Representatives are available to assist students with scheduling doctor's appointments, providing translation services, arranging for direct payment to health-care providers abroad, and transporting prescription medications," says Rachel Cullenen, director of study abroad at Ithaca College.

Cullenen says, "The insurance plan also includes medical evacuation insurance, which covers the cost of a student's transportation back to their home country or another nearby country offering appropriate medical care. This plan, in addition, pays the cost for a family member to travel to be with a student who becomes seriously ill or is hospitalized abroad."

You may not want to think about what could go wrong during a study abroad experience, but it's important to be prepared.
Financing a study abroad experience entails research, planning, and common sense. Yet, as the rising percentage of students who make this dream a reality indicate, it can be done. Ask any student who has studied abroad—each is likely to confirm that it was worth every moment of planning and every cent spent.

Medical coverage when studying abroad

Study abroad experiences entail a lot of planning and preparation researching a destination, determining a budget, and securing funding if necessary. Yet, it's easy to overlook two very critical components—health insurance and medical coverage. For members of one Madison, Wis., family, their frightening experience taught them valuable lessons.

When Ted, a student at the University of Wisconsin-Madison, decided to study abroad in Australia for one semester, his program offered an excellent health-insurance plan. "It turned out to be worth every cent we paid," says Ted's mom Joan.

During the first week of school in Australia, following an initial trip to Fiji with others in his group, Ted experienced severe upper back pain. Although the university doctor recommended a physiotherapist, Ted was wise in choosing to first rule out other medical reasons. Doctors conducted numerous tests; the results landed him in the emergency room for hospital admittance. Ted spent five weeks in the hospital on intravenous drugs and antibiotics and underwent two spinal surgeries and had other complications from an abscess on his spine. "Needless to say, Ted withdrew from the university due to too much lost time," Joan says. "But as his parents, we're so very lucky and thankful to have our son back home and under American doctors' care."

Ted's family learned, first and foremost: Enroll in emergency medical and travel insurance for the entire duration of a student's study abroad experience. Joan also recommends families be aware of the coverage caps on items like hospitalization, surgery, evacuation, and travel allowance for parents to retrieve an ill child. Furthermore, investigate what your own health insurance plan covers for out-of-area emergency situations, and research the health-care system in the country where your child is considering studying, before committing to a program.

While study abroad programs through most U.S. colleges make such information available, students considering international travel should do their homework ahead of time.



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