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It's been an interesting five years for Americans studying abroad. The pandemic slammed the brakes on many international programs, sending would-be global citizens back to their parents' homes. Now, the pendulum has swung back the other way — the number of American students studying abroad for academic credit is nearly back to pre-pandemic levels, and a growing number of students are undertaking their entire college careers outside the US as stateside higher education costs soar. Shorter trips are booming, too, as more students and families try to scratch that international experience itch.
The landscape is not an easy one: Costs are rising, scholarships are uncertain, and the political environment can be hostile. The chaos at home is following American students beyond borders, assuming they can cross them, given colliding economic and political pressures. Counselors, program administrators, and families I spoke with said that study abroad is more important than ever in today's globalized economy. It's also harder than ever to pull off.
The idea of getting an international education — whether for a summer, a semester, or an entire degree — has become increasingly appealing. Nearly 300,000 US students studied abroad for academic credit in the 2023-2024 academic year, a 6% increase from the year before, according to the Open Doors Report released in November by the Institute of International Education, a nonprofit that promotes foreign study. European destinations, namely Italy, Spain, the United Kingdom, and France, are especially popular. More American students are also choosing to spend their entire college careers outside the United States. The Universities and Colleges Admission Service in the UK reported a 14% increase in undergraduate applications from American students for the 2025 fall semester compared to the previous year. In Canada, the University of British Columbia Vancouver saw a 27% jump in graduate applications from the previous year, and the University of Toronto has seen an increase in US applicants, too.
"We are seeing off-the-charts demand for study abroad," says Melissa Torres, the president and CEO of the Forum on Education Abroad, a nonprofit that sets standards for the study abroad industry.
While more American students are looking beyond their home shores for higher education, making it out of the country is increasingly difficult. Much of the study abroad industry was decimated during the COVID-19 pandemic with programs shuttered and staff laid off. Many programs are now up and running again, especially in Europe, but getting back to full speed has been a struggle, and recent developments are adding new wrinkles.
Different schools and programs have different arrangements for financing study abroad. Some American colleges may waive their tuition for the semester, so students pay their study abroad program fee to the provider or destination institution. This setup can be cheaper, but it may also limit the scholarships students can receive from their "home" college. Alternatively, students may pay tuition to their US university, which then pays the program and/or the foreign school directly. Other US schools charge their tuition and have the student pay the program separately for housing and expenses. There is a raft of scholarships, grants, and loans available to help pick up the tab, but study abroad is often an expensive proposition. College and university budgets are under stress, and as a result, study abroad programs are being squeezed.
Ryan Dye, executive director and senior vice president for AIFS Abroad, tells me that much of the "uptick in financial anxiety" is on the institutional side. Many schools are receiving reduced state and federal funding, and the plunge in international students in the US due to the Trump administration's hardline immigration policies is hitting them where it hurts, because foreign students generally pay full tuition.
"They're being told to do all they can to retain tuition at the home institution — don't let that tuition leave the institution," Dye says. That means encouraging students to stick around the stateside campus, nudging them toward exchange programs where they pay full tuition, and capping the amount of money each student who crosses the border is allowed to receive. Schools are asking third-party study abroad administrators for discounts on the amount they charge per student, Dye says. "They're just saying, 'Look, we cannot pay out what we used to pay out. Our students can't pay out what they used to pay out. Can you help us?'"
Some of the most critical funding for financial aid was thrown into question in February, when the Trump administration paused funding for several international exchange programs, including the Fulbright-Hays Program, which supports research and training abroad, and the Gilman Scholarship, which helps fund undergraduate students studying abroad, as part of a review of federal programs and spending. It left students already thousands of miles from home in a lurch, wondering if the money would come through or their plans would have to be changed or called off. The federal government released the funding after several weeks, although some organizations complained that it was done in a sporadic, trickling manner, and many are still on edge about what the future holds.
"All that money was awarded in the end, so it's kind of hard to know what's going to really happen," says Amy McMillan, executive vice president of marketing and institutional relations at IES Abroad, a study abroad provider. IES awards about $7 million a year in financial aid of its own, and in the fall of 2025, it saw a 16% increase in aid applications compared to the year before.
In August, the Trump administration revoked $100 million of funding from at least 22 international exchange programs run by the Bureau of Educational and Cultural Affairs, which is intended to promote American values through cultural and professional exchanges. The administration reportedly deemed the programs in question lower funding priorities in the current environment. International exchange advocates have warned the cuts will likely lead to furloughs and closures and impact students' ability to go abroad.
In a statement to Business Insider, a State Department spokesperson said that under the Trump administration, the agency "continues to provide opportunities for American students to study abroad through its educational and cultural exchange programs."
Amine Mechaal, the executive director of global engagement at Columbia University's Teachers College, tells me that the environment earlier this year was "crazier" than it is now, but the financial picture remains uncertain for students who want to get away. Some can fall back on their parents, but America's shaky job market, uncertain economy, and the realities of uneven wealth in America mean that's far from guaranteed. "Because of the economic situation right now, there are a lot of concerns about students' ability to pay," he says.
It's a Catch-22 for American schools: Study abroad programs stretch their budgets, and they're useful recruiting tools for the American tuition they need now more than ever as tuition from international students dries up. It's a conundrum for programs and students alike — international students often study abroad during their American degree programs, and if there are fewer of them, organizations may be unable to fill the programs and cancel them.
Even after sorting out the money situation and making it to their far-flung destinations, American students may have to confront the economic and political realities of home. Some students might be relieved to get away, given the country's fraught climate and the chaos on some college campuses. But in today's globalized world, true escape isn't possible.
Jill Madenberg, a college admissions counselor, tells me that finances are still the No. 1 issue on families' minds when they discuss short-term or full-degree study abroad, but politics come into play now more than ever. "For some parents, the beauty of studying abroad and the ability to experience different cultures is very much top of mind," she says. And then there are others who express concerns about "how their child would be perceived as an American studying in a foreign place."
Genevieve Klein, a college junior studying abroad in Paris, says that on her first day of language classes in her program, a classmate from Italy asked her what it is like to live in the US right now. It took her a second to grasp what he was getting at, and even then, she wasn't sure how to answer. Overall, her Paris experience has been a positive one, but negative perceptions of her home country in France have made her feel like she has to change people's minds about Americans. "I think this has made me more aware in general of how people may make assumptions of others based on what is going on politically in the country they're from, now that I myself am on the receiving end of that," she says.
For Mackenzie Halford, who's finishing up a degree with a semester in Seville, it's more than uncomfortable café conversations that are weighing on their experience. They're transgender, and their passport's space for a gender identifier has an X, which the Trump administration is no longer allowing on new passports. When they first caught wind of the change, they called the consulate to see if they could obtain an emergency passport with an "F" on it. Nobody answered, but after doing some research, they think it should be fine to return to the US in December. "It's kind of left up to the discretion of the people who are working at the airport," they say.
Mechaal, from Teachers College, tells me politics are the "elephant in the room" in conversations with students. They don't address it explicitly, but there's an awareness that policies could change at any moment. "With all these shifts and changes, and almost at a certain time, it was like every day there were new updates," he says.
Study abroad used to be a carefree corner of American higher education, marked by Aperol spritzes, art museums, and weekend jaunts across Europe. But the questions facing these programs have become much more salient as the trips abroad have transformed from a luxury experience into one that's increasingly a necessity for the future workforce.
Recent research from the Forum on Education Abroad, conducted in conjunction with four business schools at large, public universities in the US, found that students who studied abroad earned, on average, $4,159 more in their first job after graduation than those who didn't, representing a 6.3% earnings differential.
"If you think about that and multiply that over a lifetime and over the retirement contributions and the increases in bonuses and salaries as a person progresses in their career, the potential financial impact is actually quite high," Torres, from the Forum, says.
A separate survey from the organization of over 8,000 study abroad alumni found that 90% of respondents said study abroad helped them build job skills, and over half said it helped them get their first jobs.
"There's a lot of talk these days about the disconnect and what employers need, and there's all this uncertainty about AI and what's the future workforce going to look like — and employers often say that people coming out of college maybe don't have the exact skills that they're looking for," Torres says. "What we're demonstrating is this is an experience that fills that gap."
International students coming to the US also contribute to the economy, with an estimated $42.9 billion added to US GDP during the 2024-2025 academic year.
Given the impact that study abroad has on individual students, jobs, and the economy, a potential slowdown, although not yet evidenced on the outbound end, is concerning. Moreover, if the opportunity becomes financially out of reach for a growing number of students, it may harm them and their future employers throughout their working lives. The study abroad cohort is already pretty privileged — the students are disproportionately white come from families who can foot the bill.
"There is a disconnect there," says Mirka Martel, the head of research, evaluation, and learning at IEE. "Study abroad should really become more accessible to more students."
Teala Avery, who graduated from Spelman College in 2024, relied on a mix of scholarships, grants, and her own money to do a semester abroad in Tokyo in 2023. It still wasn't enough, and she wound up taking out the first and only loan she needed in college to pull it off. Still, she felt like it was worth it as she ventured into the working world. "Studying abroad during college was just a no-brainer for me, and it was really like I had the dream, and then all of the logistics would come afterward," she says.
The argument is more than economic, too. Study abroad is a way for students to expand their horizons and develop more independence. It can be a transformative experience. It's also one of the rare times in many people's lives when they have the freedom to take off.
Study abroad may not be for everyone, but it's increasingly meaningful on a job application. And as costs rise and politics intrude, the gap between who can and can't swing it is widening — and that gap could shape the future workforce.
Emily Stewart is a senior correspondent at Business Insider, writing about business and the economy.
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