This is the right question to ask.
Though the sponsoring school will accept the credits, the federal aid would have to come from the University, not CIEE.
It's a bit of a gray area. CIEE is acting as a conduit between two educational institutions. So even though the billing is through CIEE, I would look at the University she is attending in Chile to see if it would be considered a qualified education.
Hundreds of schools worldwide qualify, but not every foreign school - nor domestic, for that matter - is considered a qualified institution. The school needs to be eligible for Title IV federal student aid. You can check here: http://www.savingforcollege.com/eligible_institutions/index.php
Good luck,
Brian Boswell
VP, Research & Development
This information does not constitute tax advice and is provided for informational purposes only. Please consult your tax advisor, financial advisor, local taxing authority, and/or plan provider or sponsor for more information.