This paper explores the social and educational implications of the "Secondary Schools Scholarship Project" (SSSP) in which Australia gave over 1,000 adolescents from Papua New Guinea three-year scholarships to study in Australian high schools. Drawing from postcolonial theory, the paper uses concepts of ambivalence, hybridity, hegemony, contradiction, and national discourse to analyse an array of issues which would not be in the purview of dependency theory. These issues include not only the cultural "border-crossings" and tensions experienced by the Papua New Guinean scholarship winners during their Australian sojourn and return to Papua New Guinea, but also the complex ambiguities in the outcomes and implications of a foreign aid project for a decolonising country. The scholarship programme illustrates the politics of foreign aid in education, including the contradictions of receiving aid from a donor country which is garnering substantial benefits from the recipient country, and the complexity of the postcolonial challenge of utilising this aid in a way that meets national educational goals in a globalising world.