U.S. regulation of "foreign schools": Selected considerations for institutions participating in the U.S. Student Assistance Programs

Under U.S. federal law, known as the Higher Education Act (HEA), eligible U.S. students may receive federal student aid to help pay for education expenses incurred to attend approved higher education institutions, including under certain circumstances institutions located outside the United States.

The aid is typically in the form of a loan from the U.S. government provided through the Federal Direct Loan (Direct Loan) Program. Public and private nonprofit institutions located outside the United States are eligible to participate as "foreign schools" in the Direct Loan Program if they offer academic programs that are comparable to those offered by an eligible institution in the United States and meet certain other eligibility requirements.

Foreign schools approved to join the Direct Loan Program must enter into a binding legal agreement (known as a program participation agreement) that establishes a fiduciary relationship with the U.S. Department of Education (ED). By signing the program participation agreement, a participating institution agrees to:

  • Ensure that U.S. students applying for Direct Loans meet all eligibility criteria.
  • Follow all applicable ED regulations related to the Direct Loan Program.
  • Agree to meet certain "administrative capability" standards and become subject to certain audits.
  • Submit required documents and reports in a timely manner.
  • Repay to ED loan funds if a student withdraws before finishing an academic term and reimburse ED for certain costs if the school erred in approving the loan.

Read More: U.S. regulation of "foreign schools": Selected considerations for institutions participating in the U.S. Student Assistance Programs


Download PDF Share Back To Listing
Loading data