Preparing Financially for International Study

US students are scattered all across the globe - Italy is one of the most popular destinations for American students abroad, with 30,610 students making it their academic home in 2021/2022 (the latest data as of February 2024).

So, whether you're a student dreaming of studying under the Tuscan sun or exploring the bustling streets of Tokyo, this resource is your first step towards conquering the cost of studying abroad and includes guidance on scholarships, loans, fees and healthcare.

Get ready to embark on an educational journey that's as financially savvy as it is culturally enriching!

Financial planning

For most of us, the biggest obstacle to studying abroad is the lack of financial means – but this doesn’t mean it's out of reach.

The first step is to understand all costs involved in the process, after that, you can start making preparations for gathering funds. On the whole, the main expenses you should consider include these:

Let’s get deeper into the aspects of financial preparation and your options for funding.

Tuition fees

Tuition fees vary greatly depending on the continent and country. We see that high-demand European and Commonwealth countries like New Zealand, Australia, and Canada generally have the highest charges – which almost double for international students.

Tuition fees in Europe and beyond

Countries such as Denmark, Finland, Norway, and Sweden don’t charge tuition fees, making them attractive destinations for students seeking an affordable education.

It’s also the case in many Latin American and Southern European countries including Spain and Italy.

Globally, the United States is among the top three most expensive countries for international students, with public institutions in countries like New Zealand, Australia, and Canada charging international students twice the amount or more than national students. However, it's noteworthy that 66% of developed countries offer free tuition or annual tuition of less than $2,000 for their colleges. There's also a split in the United Kingdom, with England charging up to $43,000 and Scotland capping international student fees at $25,000.

Living expenses

One crucial aspect of studying abroad is to figure out how much you need to sustain yourself in the host country. Budgeting for housing, food, transportation, and other daily expenses is key before you take any steps. This is particularly important if you’re headed to a country currency which is weaker relative to the dollar or has a particularly high cost of living – you may need to prepare yourself to make changes to your lifestyle.

The cost of living for international students typically ranges from $10,000 to $20,000 per year, excluding tuition fees. This includes:

• Accommodation

• Food

• Transportation

• Your allowance

• Other daily expenses

For instance, in Australia, the average monthly cost of living with rent is approximately $1,800 to $2,900, while in New Zealand, it's around $1,650 to $2,050. In the United States, the average annual cost for on-campus accommodation with a meal plan is about $11,837.

• The costs are averages and can vary based on the city and lifestyle choices.

• Accommodation costs are based on on-campus residential fees with meal plans for an academic year, where available.

Budgeting for a balanced lifestyle

Budgeting is key to enjoying your time abroad without financial strain. Good spending decisions can mean the difference between living frugally and comfortably.

For example, choosing shared accommodation or living in a less expensive city can significantly reduce costs. Additionally, part-time work can supplement your budget and provide valuable local experience. In Australia, for example, the high minimum wage allows students to earn a decent income from part-time work.

Don’t forget that while studying in a foreign land, you will also inevitably want to travel more – across the country, neighboring countries, and perhaps even further. To make the most of your time there, it helps to reassess your priorities, identify your crucial expenses, and budget accordingly.

The cheapest places to study abroad

Renowned for its robust education system, Germany offers free tuition at undergraduate and PhD levels in public universities, even for international students. While tuition is free, students are required to pay a nominal semester fee of around €250 (~US$300). Living expenses in Germany are approximately €10,200 (~US$12,000) per year.

Offering a fusion of traditional and modern cultures, Taiwan is increasingly popular among international students. With tuition fees at leading universities around TW$100,920 (~US$3,300) per year, it's a financially viable option. Living costs are also relatively low, with estimates of TW$90,000-150,000 (~US$2,900-4,800) per year.

Known for its diverse culture and history, South Africa is an affordable study destination with average tuition fees of around R30,000-70,000 (~US$2,000-4,700) per year for undergraduate courses. Living costs are also modest, with students needing about R120,000 (~US$8,000) annually.

Offering a rich historical backdrop, Poland is another cost-effective option for international students. Non-EU students pay tuition fees of around €2,000-3,000 (~US$2,400-3,600) per year. The cost of living is relatively low, with students needing about PLN 21,000-28,000 (~US$5,500-7,300) per year.

Known for its stunning natural beauty, Norway is unique in that it offers free tuition at public universities to both EU and non-EU students. This policy makes it an exceptionally affordable destination. However, students should budget for the high cost of living, estimated at around NOK 123,519 (~US$14,000) per year.

International scholarships can help you realise a dream

Although it’s quite competitive, there are plenty of scholarships available for international students – especially designed for exceptional students.

Scholarships range from full to partial coverage depending on your performance and financial circumstances, and the eligibility may depend on your chosen major.

Exploring opportunities for undergraduates

For undergraduate students, finding universities that offer full scholarships can be a game-changer.

These scholarships open doors to prestigious institutions and unique academic experiences worldwide. They are designed to attract and nurture young talent, providing them with the tools and opportunities to excel in their chosen fields.

International scholarships around the world

Common eligibility criteria for scholarships:

While it differs quite widely, below are the common eligibility criteria found in most scholarship programs.

• Academic Excellence: Many scholarships emphasize high grades or standardized test scores.

• Specific Demographics: Some scholarships are designed for students from certain countries, regions, or for specific demographics such as women or minority groups.

• Field of Study: Certain scholarships may be limited to students pursuing specific fields of study.

• Financial Need: Some scholarships require proof of financial need.

• Personal Statement or Essay: A detailed account of your academic and career goals, achievements, and reasons for seeking the scholarship.

• Letters of Recommendation: Typically, two to three letters from your individuals (non-family members) who can attest to your qualifications and potential.

• Academic Transcripts: Official records of your academic history and any certificates you may have received.

Navigating the best international scholarships

Finding the right scholarship can be a daunting task, but it's a journey worth embarking on. While on this journey, pages and pages long PDFs will be your best friend, people’s experiences on Reddit will be your savior, and you will need gallons of coffee.

But in the end, it’s worth it. There are so many scholarship opportunities out there and it may just be within reach provided that you have a performance to be proud of and are organized.

Here are some pointers that can help with your search and application:

• Understand Deadlines: Scholarship deadlines can vary greatly. Starting early gives you the advantage of planning your applications according to these timelines, ensuring you don't miss out on opportunities.

• Preparation Time: Some scholarships require comprehensive documents such as essays, portfolios, or letters of recommendation. Starting early gives you ample time to prepare these materials thoughtfully.

• Diversify Your Sources: While scholarship databases and university websites are great starting points, also consider organizations, companies, and governmental agencies that might offer scholarships in your field of interest.

• Identify Niche Scholarships: Look for scholarships specific to your background, field of study, or interests. These might have less competition and can increase your chances of success.

• Customize Your Essays: Avoid generic essays. Tailor each application to reflect how you meet the specific criteria of each scholarship.

• Highlight Relevant Experiences: Emphasize experiences and achievements that align with the scholarship's goals. Whether it's community service, leadership roles, or academic achievements, make sure your application showcases how you're a perfect match. Remember, these scholarships are not just looking for scholars but future global leaders and innovators.

• Be Clear and Concise: Your essay should clearly articulate your goals, aspirations, and why you deserve the scholarship. Avoid unnecessary jargon and keep your writing accessible.

• Seek Feedback: Before submitting your application, have someone review your essays. Feedback from teachers, mentors, or peers can provide valuable insights to improve your application.

• Revise and Edit: Ensure your essays are free from grammatical errors and typos. This not only improves readability but also demonstrates your attention to detail and commitment to excellence.

• Follow Instructions Carefully: Ensure you follow all application instructions meticulously. Missing documents or incorrect formats can lead to disqualification.

• Use Professionalism in Communication: When contacting scholarship committees or asking for recommendations, maintain a professional tone. First impressions can be influential.

• Stay Organized: Keep track of deadlines, required documents, and application progress for each scholarship. A spreadsheet or a dedicated folder can help manage this information efficiently.

• Prepare for Interviews: Some scholarships may require interviews. Prepare by reviewing common interview questions, rehearsing your answers, and understanding the scholarship's mission and how you align with it.

Other financial aid options

Besides scholarships, which dwell largely on academic excellence, there are also other financial aid options mostly designed for those who come from economically disadvantaged backgrounds.

Introducing FAFSA

The Free Application for Federal Student Aid (FAFSA) is the primary step for American students, whether studying domestically or internationally. Applications open on October 1st for programs starting the following autumn. It's crucial to apply as early as possible.

• Start an application with FAFSA

Aid for Exchange Programs vs. Full Programs: Financial aid is available for both semester exchanges and full degree programs. If studying through an American university, list that institution on your FAFSA. For a full degree abroad, list the specific international school, provided it participates in the loan program.

Types of Funding: Undergraduate students can receive funding through Direct Subsidized or Unsubsidized Loans. However, Federal Pell Grants are not available for full degree programs at international universities. Consider private loans if federal aid is insufficient.

Post-FAFSA Process: After completing the FAFSA, consult your specific school for further steps. Schools often receive funds directly from the US Treasury for tuition, with excess funds possibly deposited in your student account or returned to you.

Graduate Students: Not all graduate programs at international universities participate in federal student loan programs. Verify if your chosen university allows deferment of existing loans while studying.

For any student financing options, there are some key considerations to keep in mind:

Making currency exchange rate fluctuations work for you

Be aware of the exchange rate between your home currency and that of the host country.

When studying abroad, fluctuating currency exchange rates can have a significant impact on your financial planning and day-to-day expenses.

Exchange rates determine how much of your home currency is needed to purchase the local currency, affecting everything from tuition fees to living costs.

For students paying tuition in a foreign currency, a weakening home currency means more money is required to meet the same tuition costs.

This can lead to an unexpected increase in educational expenses, potentially straining your budget. Conversely, if your home currency strengthens, your tuition and living expenses could effectively become cheaper.

Living expenses such as rent, groceries, and leisure activities are also subject to the whims of exchange rates.

A sudden shift can mean that your regular expenditure could either increase or decrease without any change in your consumption habits. This volatility necessitates a flexible budget and continuous monitoring of exchange rates.

If you rely on financial support from home as an international student, like regular money transfers, the amount you receive in the local currency can vary with exchange rate fluctuations.

This uncertainty can make it challenging to maintain a consistent standard of living.

To mitigate these risks, it's advisable to keep a portion of your funds in the local currency and regularly track exchange rate trends.

Some students use financial tools or hedging strategies like forward contracts to lock in favorable exchange rates for future tuition payments, providing a buffer against adverse fluctuations.

Others prefer to use specialized apps and services to pay for their education abroad, for example, students from Nigeria moving to Canada or the US can benefit from the Pay4Me app, which streamlines the tuition payment process.

Ultimately, there are many ways to pay for education abroad to avoid these fluctuations, and being aware of and prepared for these changes is key to managing your finances effectively while studying abroad.

Benefits of using a multi-currency account while studying abroad

A multi-currency account is invaluable for students abroad, offering the convenience of managing multiple currencies in one place. This reduces the need for frequent, costly currency conversions.

Such accounts typically offer competitive exchange rates and lower fees, leading to significant savings on large transactions like tuition and living expenses. They simplify international money transfers, making it easier to receive funds from home or send money back. Additionally, these accounts often come with online tools for efficient budgeting and expense tracking, and they provide debit cards for secure and flexible international transactions. This functionality is crucial for students managing finances independently in a foreign country.

Choosing the best credit card for studying abroad

Selecting the right credit card for studying abroad involves considering no foreign transaction fees, ensuring global acceptance (preferably Visa or Mastercard), and evaluating rewards and perks, especially travel-related ones. It's also important to have a card with emergency assistance services for unforeseen situations.

For students aiming to build a credit history, choose a card that reports to credit bureaus. Prioritize cards with advanced security features like chip-and-PIN technology and fraud protection. Finally, balance the benefits against any annual fees and compare interest rates, particularly if you plan to carry a balance. This careful selection can greatly simplify financial management while abroad.

Applying for a student visa

Applying for a student visa is a critical step in the journey of studying abroad, involving both cost and legal requirements. The cost of a student visa varies by country.

For instance, applying for a student visa to Australia costs around $450, while it's about $36 for South Africa. In some countries, like Germany, international students are exempt from visa fees but need to demonstrate a high amount of required funds. Additionally, students might incur travel expenses to the nearest embassy or consulate for a visa appointment.

Legally, before applying for a visa, students must be accepted by their schools or program sponsors. This acceptance is crucial as it forms the basis of the visa application. The process typically involves providing proof of acceptance, financial stability, and intent to return home after studies. It's important to start this process well in advance due to potential processing times and additional requirements that may vary by country.

Understanding these costs and requirements is essential for budgeting and planning your study abroad experience. It ensures that you are legally prepared and financially equipped to embark on your educational journey in a foreign country.

Here are the core links to help you start the application process, a couple of case studies to help gain perspective:

Things to consider

In these examples, both the UK and Australian student visas require applicants to demonstrate their intention to return to their home country after their studies - this is a common requirement for international students.

The UK visa uses a points-based system, where applicants need to accumulate enough points to be eligible. In Australia, the visa validity typically aligns with the course duration, and students can work for up to 40 hours every two weeks once their course starts.

Make sure to include a cover letter with your application

The cover letter should clearly outline your intentions, study plans, and how you intend to support yourself during your stay in Canada.

• Personal Introduction: It introduces you to the visa officers and gives them a first impression of you as an applicant.

• Clarifies Intentions: The cover letter explains the reasons for choosing to study in Canada, your chosen institution, and your course of study.

• Financial Plan: It details your financial plan, showing how you intend to fund your education and living expenses.

• Compliance with Requirements: Demonstrates your understanding and compliance with the visa requirements.

• Addresses Previous Visa Rejections: If applicable, it explains past visa rejections and how current circumstances have changed.

Importance of picking the right health insurance for international students

Chances are that you will have to provide private health insurance as part of your visa application that will cover you throughout your stay in the host country. Even if it's not required, it's definitely wise to do so.

Selecting the right health insurance is a crucial aspect of preparing for study abroad. The CDC's Yellow Book 2024 emphasizes the importance of comprehensive health insurance for student travelers, covering major medical expenses, evacuation, and repatriation.

Here's a summary highlighting the importance of choosing the right health insurance for studying abroad:

• Comprehensive Coverage: Insurance should cover major medical expenses, including unexpected illnesses and injuries. This is vital as healthcare costs in foreign countries can be prohibitively expensive.

• Evacuation and Repatriation: In case of serious medical emergencies, insurance should cover costs for medical evacuation and repatriation. This ensures students can receive appropriate medical care or return home if necessary.

• Pre-existing Conditions: Students with chronic illnesses or pre-existing conditions should ensure their insurance covers ongoing treatments and medications.

• Mental Health and Well-being: Considering the stress and culture shock associated with studying abroad, insurance plans should ideally cover mental health services.

• Adventure Activities Coverage: For students engaging in adventure sports or activities, it's important to have coverage for extreme sports, as these are often excluded from standard policies.

• Local Healthcare System Knowledge: Understanding the healthcare system of the host country is crucial. Some countries may require students to enroll in their national health system or have specific insurance requirements.

• Accessibility and Support: The insurance provider should offer 24/7 support for emergencies. It's also beneficial if the policy includes assistance services, like help in finding local doctors or handling medical emergencies.

• Legal Requirements: Some study abroad programs and countries have specific insurance requirements. Students must ensure their policy complies with these regulations.

• Duration of Coverage: The insurance should cover the entire duration of the study period abroad, including any travel before or after the program.

Once you’ve arrived

Overview of tax obligations for US students abroad

US students studying abroad need to be aware of their tax obligations, both in the US and in the host country. The US has tax treaties with several countries, which can affect the amount of tax a student might owe. Here's a brief overview and a table highlighting tax obligations by country based on the tax treaty provisions:

US Tax Filing: US citizens or residents abroad are generally required to file income tax returns in the US, similar to those residing in the States. This includes income from worldwide sources.

Tax Treaty Benefits: The US has tax treaties with various countries, which can provide benefits such as reduced tax rates or exemptions for certain types of income.

Tax Treaty Time Limits: Many treaties have time limits on how long the benefits apply, often related to the duration of the student's academic program.

Reporting Requirements: Students may need to report foreign bank and financial accounts if the aggregate value exceeds $10,000 at any time during the calendar year.

Tax obligations by country (based on tax treaty provisions)

Looking after your mental health

Mental health is a critical issue for international students, with various studies highlighting the unique challenges they face. Here are some key statistics and solutions for those struggling with mental health issues after moving abroad:

• Prevalence of Mental Health Issues: A study of Australian university students found that international students often experience lower mental health-related knowledge and higher stigmatizing attitudes compared to domestic students. However, international students showed higher help-seeking intentions and a lower prevalence of self-reported mental health problems.

• Stress Levels: According to the 2022 International Student Barometer (ISB), 35% of international students reported high levels of stress and anxiety, a figure that has risen since the pandemic.

• Use of Counseling Services: Only 16% of students in the ISB survey reported using counseling services, with 22% unaware of how to access these services.

Wrapping up

Here’s a quick recap of what we’ve been talking about:

• Understanding the full spectrum of expenses—from tuition fees to living costs and the often-overlooked visa and healthcare requirements—is essential for a smooth transition.

• Understand all costs involved: tuition, living expenses, passport, and visa fees.

• Research tuition fees by country and consider destinations with lower or no tuition fees for international students.

• Budget for housing, food, transportation, daily expenses, as well as travelling to nearby cities/countries for sightseeing. Equip yourself with a local currency or multi-currency bank account to save on currency conversion fees.

• Start applications early and tailor them to specific scholarship requirements.

• Narrow down your search to match your circumstances–academic excellence, specific demographics, and fields of study.

• Understand the visa process and costs for your destination country.

• Prepare the necessary documents and apply well in advance.

• Choose comprehensive health insurance that covers major medical expenses, evacuation, and repatriation.

• Be aware of tax obligations in both the US and the host country.

• Utilize tax treaty benefits if applicable.

• Recognize the importance of mental health support while abroad.

• Utilize counseling services and be proactive in managing stress and anxiety.

• Consider part-time work to supplement finances.

• Prepare for the cultural transition and set realistic expectations.

• And enjoy!

Each of these steps involves critical considerations that can significantly influence the success and enjoyment of your study abroad experience. Besides these, one thing you should remember is that it's never too early to plan.

By planning early you can go through all your options for universities, scholarships, financial aid programs, and other funding opportunities and make the most out of them. Planning and filling out applications will (hopefully) be the most strenuous part of your overall experience. Try to think of it as laying down the tracks for a smoother ride. It’s not just about dodging potential hiccups along the way–it’s really about making sure you can be present and soak up every bit of that once-in-a-lifetime learning and cultural experience.

Sources & further reading

• Fulbright Foreign Student Program

• Chevening Scholarships

• Graduate Scholarships

• Australia Awards Scholarships

• DAAD scholarship programmes

• FRANCE EXCELLENCE EIFFEL SCHOLARSHIP PROGRAM

• Japanese Government (MEXT) Postgraduate Scholarships

• Chinese Government Scholarship Scheme 2023/2024 (Long-term)

• Apply for FAFSA aid

• Canada study permit application process

• How to apply for an Australia visa

• Applying for a visa in New Zealand

• UK Student visa

• Study in Italy

• Visas in Germany

• Studying in France as a non-EN citizen

• Student Visa in Spain

• Student Visa in Ireland

• GENERAL INFORMATION ON UK ENTRY VISAS

• Korean Student Visas (D-2)

• Student Temporary Resident Visa in Mexico

• Canada Reduces Foreign Student Permits by 35% in Effort to Reduce Soaring Numbers