Government of the United States - Federal Student Aid-Subsidized Loans

Federal Direct Subsidized Loan for study abroad

You can take out a low-interest loan from the US government to fund a full course of study at a higher education institution outside the United States. As an undergraduate student, you can borrow up to approximately 5,000 euros per year, with the amount increasing with each academic year: approximately 3,000 euros in the first year, 3,900 euros in the second year and, from the third year onwards, 4,700 euros (approximately USD 3,500 / 4,500 / 5,500). The maximum amount is around EUR 20,000 (USD 23,000) for the entire course of study. The US Department of Education covers your interest payments as long as you are enrolled at least half-time, during the six-month grace period following your graduation, and during approved payment deferrals. The loan therefore does not accrue interest whilst you are studying. For 2026–27, the interest rate after repayment begins is a flat rate of 6.52% per annum. A loan fee of approximately 1.06% is deducted from each disbursement. You will begin repaying the loan after a six-month grace period and will repay the loan over a period of 10 to 30 years.

Who can apply

• Nationality: You are a US citizen or an eligible non-citizen.
• Level: You are a bachelor’s student. Master’s and doctoral students are only eligible for unsubsidised loans, not this one.
• Financial need: You must demonstrate financial need. This is determined on the basis of your FAFSA form, the application for federal student aid in the USA.
• Where you study: You are attending an educational institution outside the US that participates in the ‘William D. Ford Federal Direct Loan Programme’. The list includes educational institutions in Australia, the UK, Ireland, Canada, Poland, Israel and many other countries.
• Enrolment: You are enrolled on at least a part-time course. Your course lasts for at least one year and leads to a degree, a diploma or a certificate.
• Study mode: Your degree programme is not purely distance learning or a distance-learning course. These modes of study are not an option.
• Field of study: Any topic is fine.

How to apply

Complete the FAFSA form at fafsa.gov and enter the Federal School Code for the overseas university you wish to attend. There is no separate form for international higher education institutions. If this is your first loan, you will also need to attend an induction session and sign a Master Promissory Note – your written commitment to repay the loan.

How realistic are your chances?

This is not a competitive scholarship, but rather an entitlement: if you meet the specified criteria, you will receive it. The key criteria are that you are a US undergraduate student with demonstrated financial need, studying at a participating overseas university. You should therefore check the current list of participating universities before committing yourself. Please note that this is a loan which you must repay with interest. Financial aid such as the Pell Grant is not available for degree programmes completed entirely abroad.