Colleges have varying policies when, for their own “head count" purposes, they decide if a candidate in your daughter's situation will be viewed as an international applicant or as a domestic one (a U.S. citizen living abroad). However, for FINANCIAL AID purposes (critical for many families), your daughter would be considered a DOMESTIC applicant. In other words, because she is a U.S. citizen, she will be eligible for Federal financial aid (if your income and assets qualify) and/or for Federal loans. The fact that her parents are not citizens and that she, herself, lives abroad will not affect your daughter's eligibility for Federal assistance as long as she—the applicant—is a citizen.
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