Published in: Student Loans | Oct. 15, 2019

Can You Save Money on Student Loans by Going to College Abroad?

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We all know the U.S. is one of the most expensive places for college. Why not look overseas?

With the annual cost of college tuition surpassing $10,000 at public universities and $36,000 at private universities during the 2019–20 academic year, a four-year degree can now cost American families as much as a small house. It's no surprise that more than 44 million people in the U.S. are a collective $1.5 trillion deep in student loan debt.

Given that the United States is one of the most expensive countries in the world to attend a university, some students are looking overseas to get their degrees at a lower cost and minimize student loans or avoid them altogether. Think of it as a romantic semester abroad, only they stay there all four years.

This can be a wise move for folks who are open to living in a foreign country. However, it doesn't always result in savings. Here's what you need to know.

College students studying on a grassy quad.

Image source: Getty Images

Why going to college in a foreign country can be expensive

Tuition costs vary drastically from country to country and even within countries. While the U.S. is generally considered the most expensive place in the world to attend college, there are other countries that come close, at least when it comes to public school tuition.

While the average annual tuition for undergraduate students at a U.S. public university in the 2015–16 school year was $8,202, it was $7,654 in Chile and $5,229 in Japan, according to the Organisation for Economic Co-operation and Development. Annual undergraduate tuition at a private university in the U.S. was at $21,189, while it hit $11,951 in the United Kingdom and $8,827 in Australia.

However, these numbers apply to national students. International student tuition is often significantly higher. For example, yearly tuition for national undergraduate students studying at the University of Cambridge in the United Kingdom in 2020 is £9,250, or about $11,535. For international students, the rate ranges from £21,168–£32,214, or about $26,118–$39,748, depending on your course of study. In this case, it's far more affordable to go to a public university in the United States.

On top of that, you have to factor in living expenses. While the United States has a higher cost of living than most countries, many of the most popular countries to study abroad in also have a fairly high cost of living. As an international student, you'll probably have to factor in additional costs like flights back to the U.S. during breaks, too.

Using financial aid to study overseas

Another factor to consider is whether or not you'll be able to get financial aid and scholarships while studying overseas. You might be looking at a university in another country with lower tuition rates, but if you can get most of your tuition covered in the U.S. with grants and scholarships, it's probably a better deal to stay home. Even if you have to resort to student loans for undergraduates, most federal student loans have relatively reasonable interest rates.

Some foreign universities participate in U.S. federal student aid programs, and others don't. You may be able to qualify for federal student loans at these participating universities. However, no foreign universities participate in the federal grant program, so loans will be your only option for covering the cost of college using federal financial aid.

You might not qualify for the same scholarships and grants from the university of your choice as an international student, either. However, many universities and organizations do offer scholarships specifically for international students.

The best way to figure out financial aid and scholarships as an international student is to talk to an admissions counselor at the university you're interested in attending. Their entire job is to guide you through the admissions and financial aid process, so take advantage of that resource. They can often help you find funding you didn't know about.

The cheapest countries to go to college abroad

Despite these obstacles, it's possible to make studying in a foreign country work to your financial advantage. Plenty of countries are home to excellent universities with low-cost, or even free, tuition. You may need to learn the local language, though it's not uncommon for universities in foreign countries to offer some programs taught fully in English.

For example, undergraduate international students can attend the National Autonomous University of Mexico, one of the best universities in Latin America, for under $1,000 per year. The University of Buenos Aires, another top Latin American school, is free for both national and international students, but you must first gain residency in Argentina to attend. Universities in Taiwan, Malaysia, and China are also popular low-cost options.

Many European countries have low-tuition and tuition-free universities. Universities in Germany, Norway, and Luxembourg are free, even for international students -- and you can find programs taught in English. Finland, Sweden, France, and Spain all have very affordable tuition rates for international students as well.

Getting your degree abroad is far from easy. There's a lot more planning involved, and often extra costs from visas, traveling, and making sure your degree will hold its weight when you come back home. Make sure you understand student loans and financial aid before making any decisions, too.

With enough research, going overseas for a bachelor's degree can be a smart way to pay for college out of pocket and avoid the burden of student loan debt.

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