Considering Studying Abroad? Here’s What You Need to Know

by Jalen & Sarah Bromley

Whether you envision yourself sipping espressos in Italy, diving the Great Barrier Reef, or something else entirely, studying abroad is a dream for many students. But often, the choice over where you’ll go doesn’t come down to what your heart desires: It’s more about what your wallet can afford. If you’re worrying about studying abroad on a budget, you’re in the right place.

We’ll run through everything you need to know to have a great time without breaking the bank — including planning your trip, financing options, and keeping costs low when you arrive.

The average cost of studying abroad

Estimations from the University of Louisiana suggest that it costs between $7,000 and $15,000 to study abroad for a semester. This cost can be even greater if you extend your trip to last an entire year.

Location differences

Naturally, these costs will vary hugely on where you go and how you spend your time there. Perhaps the factor with the greatest impact on overall costs is the location you opt for — expect to spend more in Japan or France than Malaysia or Ghana. 

Of course, it’s not just the country that matters. Choosing to study in a capital city in Latin America could end up more expensive than living in a rural village in France, for instance. If you really want to keep costs down, consider choosing a smaller city or town. Just because you don’t live in the capital, it doesn’t mean you can’t travel there regularly. 

Once you know which city or town you will be living in when you study abroad, you can compare the average cost of living to your current home. Is it more expensive, cheaper, or around the same? This is a good starting point for guessing how much your trip will cost you, although we’ll guide you through creating a more precise estimate in this article.

How to plan for studying abroad

Before we dig deeper into organizing your finances for studying abroad, let’s take a moment to look at the bigger picture. What do you want your time studying abroad to be like as a whole?

Here are a few factors you should consider.

Choosing a university 

One of the most significant decisions you’ll have to make when studying abroad is which country you study in. And as much as we believe financial considerations matter, you probably shouldn’t make this decision solely on economic grounds.

If you have a dream university or city you’ve always wanted to live in, you should take that into account. Some students may be studying a language or a subject that revolves around a particular region, in which case your decision is largely made for you already.

Not everyone studies abroad for educational reasons, but if your classes count toward your final grade, you’ll likely want to consider the quality of the education system and program you’ll be attending. Consider the number of classes you can choose between and the type of assessment used (i.e., exam vs classroom assessment vs coursework).

In terms of practical considerations, safety is a big one for studying abroad. Check potential locations’ crime rates and weigh how much risk you’re willing to tolerate. If it’s your first time abroad, you may feel overwhelmed in an area with a high crime rate, while experienced travelers may be unfazed.

Semester vs year

When studying abroad, you’ll generally get the choice to spend a semester or an entire academic year in your host university. From a purely economic perspective, opting for one semester might seem like a no-brainer. However, this isn’t necessarily true. 

No matter how long you spend in another country, you’re (probably) going to have to spend the same amount on flights. If you’re traveling very far afield, the flights could be your biggest expense. Plus, a shorter stay might mean spending the same amount on expensive trips and entertainment but squeezing them into a shorter time frame out of necessity. This just leaves your regular costs, which can vary hugely depending on where you go. 

If you’re studying abroad in a lower-cost-of-living country, the cost of staying for a few additional months may be negligible (and far cheaper than those at home). On the other hand, if you’re studying in another expensive country like Australia, the cost of the rent may make it tough to justify sticking around too long.

Study abroad vs exchange

Both study abroad and exchange programs involve studying in another country, so they’re often used as synonyms. But there is a difference. On an exchange program, you’ll still be enrolled in your home university — and pay the same tuition fees as you usually pay. This means you won’t have to compare the costs of your exchange university with your current tuition fees or figure out if you can use the same financial aid package. 

In contrast, on a study abroad program, you pay the tuition fees associated with your host university. In some cases, you also won’t integrate with the students from the host university in the same way as you would on an exchange program, and may study at a specific center for study abroad students. 

In general though, the two processes are very similar. If you have any doubts, it’s best to check your options with your college.

How to find affordable study abroad opportunities 

Now you know where you want to go, you can focus on making it as affordable as possible. That largely comes down to the loans and scholarships you can access.

Loans

As mentioned, if you opt for studying abroad, you’ll remain enrolled in your current US university and have access to the same loans, grants, and loans you are eligible for now. Your Financial Aid Office will be responsible for ensuring you only receive the right financing, and ask you to sign an agreement.

The two main exceptions to this are students on Tuition Remission scholarships, who can only use aid toward studying abroad, and students on the GI Bill, who need to check which programs they can use their package for.

In some cases, your financial aid may be withdrawn if you fail to pass your classes while abroad. This gives you another reason to look carefully at how a university will assess before you sign up for its classes! 

Additional scholarships

Even if you think you’ll be able to scrape by on your year abroad with the financial aid you can currently access, you should always look at additional available scholarships.

Many colleges have dedicated scholarships for people studying abroad, which may be based on your financial need, academic performance, or even the reason for your trip or where you’re going. Make sure you talk to the Office of Study Abroad at your university and comb through the scholarships carefully.

Key expenses when studying abroad

Securing a scholarship to fund your year abroad is a great start, but it may not cover everything. To make sure you’re as prepared as possible, consider the different expenses you’ll face while studying abroad. 

Insurance

When planning something as exciting as studying abroad, you’re probably not going to be thinking of the worst-case scenarios of what could happen, such as ending up in a car crash or being robbed. But these things do happen, so make sure your insurance has your back.

In some cases, your home university may cover this for you. In other cases, the country you’re visiting could require you to have a certain policy to be able to study there.

Transportation

Transportation isn’t something many students consider before they arrive in a foreign country, but it can end up being surprisingly expensive. Most don’t rent cars unless they’re planning to take a road trip or living in a remote location, you’ll most likely be at the mercy of the public transportation system.

In this case, it’s worth looking for any season tickets to bring the cost down. Many places offer student discounts too, allowing you to secure an even better price.

Housing 

Accommodation always has a huge impact on your budget, and studying abroad is no exception. There are three main types of accommodation when studying abroad:

  • Homestays with a local family
  • Privately rented accommodation
  • Dorm or university-owned accommodation 

The best option for you will depend on your preferences, availability, and where you’re studying.

Universities often subsidize the prices of dorms, so these can be a cost-effective choice. However, some universities don’t offer dorms.

As for homestays, it might sound daunting to stay in with a stranger, but many universities have dedicated programs where they screen hosts for you — we don’t recommend staying with the first random person you find advertising on Craigslist! A homestay can be a great way to develop a relationship with a local family or person, learn more about the culture, and possibly boost your language skills.

Some homestays also include the cost of meals in the price, which can make a massive difference to your budget.

Private renting can also help you develop relationships with local people, although many exchange students end up staying with other exchange students. If you do opt for a private rental, make sure you know what the prices includes (i.e., electricity, water, and gas).

Entertainment 

It might be called “studying abroad,” but an exchange is about a lot more than studying. Most students want to spend their free time exploring the local area, partying, doing fun activities with friends, and sampling the cuisine. This can easily break your budget, which can cause you a lot of stress and worry.

Instead, factor in your entertainment costs in advance.

Examples of the miscellaneous “entertainment” category include:

  • Shopping for clothes, souvenirs, etc
  • Travel and accommodation to other areas
  • Restaurants, cafes, and takeaways 
  • Night club tickets, concerts, and events
  • Bars and drinks
  • Sports and activities 

Decide in advance what your priorities are, because it’s unlikely you’ll be able to afford everything you want. For instance, would you prefer to take that road trip across the country but live frugally the rest of the time, or spend most of your money on fun activities in your local area?

Managing your money when studying abroad

Hopefully your head isn’t spinning yet, because we’re far from finished. Here are some further financial considerations to make before studying abroad. 

Exchanging currency

When you’re abroad, it’s not just the usual expenses like rent or groceries that you need to worry about. Hidden fees involved in exchanging currencies can be just as dangerous. If you google the exchange rate between two countries, the number you get is unlikely to be the rate you actually pay when you go to a currency exchange bureau or spend your card in another country. 

Generally, you’ll pay the exchange rate your payment processor (or the exchange bureau) decides, which is more favorable to them than you. It might not seem like a big deal to lose a few dollars here and there on your transactions — but when you consider that you could be making multiple payments every single day, those costs can really add up. Plus, some card companies charge additional foreign transaction fees.

To get the best exchange rate, your two top options are travel credit cards and international bank accounts. Travel credit cards get their name because they don’t charge foreign transaction fees. Plus, they allow you to exchange currencies at the interbank rate (the rate banks charge each other), which is far better than what most payment processors offer.

International bank accounts let you switch seamlessly between currencies for market-leading rates. They also come with cards that don’t charge foreign transaction fees and let you spend and withdraw money at the bank exchange rate without charging a premium. Wise and Revolut are both good options, but make sure they work with your currency of choice.

Banking abroad

Depending on which country you’re visiting, you may want to create a bank account abroad. Although this won’t generally be necessary, there are exceptions, such as needing a bank account to deposit your salary into or setting up a payment for your university fees. You may also want to consider creating a local bank account for your own benefit if you’re studying abroad for a full year — some people like to know they can access customer support in the branch if anything goes wrong.

If you do want to bank abroad, you’ll have to look into the requirements for the specific country. You may need certain documents to be able to open the account, such as a letter of acceptance to the university, your visa, and a personal identification.

And make sure you close the account before you leave the country, or you could give yourself a headache!

Working abroad

If you’re starting to break out in a sweat thinking about all the potential costs involved in studying abroad, you may be relieved to know that you could have the chance to work while you study. But like many of the sections in this article, this can get rather complex.

When you’re studying abroad in another country, you’ll be living there on a student visa, and that almost always means restrictions on working. Some countries still let you work but limit your hours — Australia and New Zealand both fit into this category. However, other countries won’t let you work at all (or make it very difficult). In the United Kingdom and Ireland, students need to spend the whole year in the country to be able to work.

If you are allowed to work, popular jobs for exchange students include:

  • Teaching English
  • Bar work
  • Restaurant work
  • Retail

Even if you can’t get a job, you may want to consider volunteering. It won’t help your budget, but it’s a fantastic experience, a great way to go back, and it’s cheaper than many other activities exchange students favor.

Creating a budget

Once you have an idea of what your expenses will be while studying abroad, you can create a budget. You’ll likely struggle to build a clear picture of how much everyday expenses like food are until you adjust, so you may need to tweak your budget over time. But it still helps to have a rough budget in mind before you arrive.

Once you’ve decided which college and country you’ll be heading to, go over all the categories we’ve outlined above and work out your costs through online research. Then, check how much money you’d bring in from scholarships, loans, and any other income sources. 

How do the two match up? Would you need to find more scholarships or work to make up the shortfall?

Preparing for the unexpected 

Even the best budget can’t prepare you for all the potential circumstances you could encounter while studying abroad. We’ve already covered insurance, but that won’t cover everything — and chances are that you’ll need to pay with your own money first and then claim back from your insurance afterward.

This is why it’s so crucial to have an emergency fund: A pot of money that you can dip into when unexpected (and expensive) circumstances crop up. It might seem daunting to save this up on top of all the other costs associated with studying abroad, but this is non-negotiable when living alone in a foreign country. Anything could happen to you. The standard rule for an emergency fund is to set aside six months of expenses, but you should at least aim for a few thousand.

However, not all emergencies are financial. You may also encounter mental health struggles or personal issues while studying abroad. It’s therefore good to know where you can seek support from your local and home university in advance. Get the relevant numbers saved on your phone. 

How to transition back to life in your own country

As you plan to study abroad, adjusting to normal life when you return is probably the last thing on your mind. But this is something many students struggle with — and they need to learn to grapple with it fast if they’re straight back to assignments once they do come back.

First of all, give yourself time to look back on your experiences rather than forcing yourself to return to the status quo immediately. Spend a few days looking through photos, writing a journal, or whatever else you feel like.

If you’re still feeling nostalgic, look for ways to bring the things you loved most about studying abroad into your current lifestyle. Loved the food? Find out how you can source the same ingredients where you are. Was it all about spending time with people across the world? Look for places you can meet a similarly diverse group of people who live close by. 

Staying in touch with the friends you made while studying abroad can also be a helpful way to aid the transition. They’re the people who know exactly what you’re going through, and you can reminisce about your experience without worrying about being annoying. 

Bon Voyage

You shouldn’t let your finances stop you from living your dreams of studying abroad, but don’t let the excuse of dream fulfillment let you make irresponsible decisions either. Fortunately, you can strive for a balance by researching potential costs carefully, making a budget, and being aware of the best ways to optimize your finances when you arrive.

Looking for more ways to make or save money to help fund your year abroad? The whole of Frugal Student centers around students and studies, so you’re in the right place. Be sure to subscribe to our mailing list to keep yourself in the loop.

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