The programme will increase manifold the number of Saudi students and scholars by the academic year's end. And big, public universities from Florida to the Kansas plains are in a fierce competition for their tuition dollars.
The kingdom's royal family - which is paying full scholarships for most of the 15,000 students - says the programme will help stem unrest at home by schooling the country's brightest in the American tradition.
The US State Department sees the exchange as a way to build ties with future Saudi leaders and young scholars at a time of unsteady relations with the Muslim world.
Administrators at Kansas State University, an agricultural school surrounded by miles of prairie grass, say the scholarships are a bonanza for public education.
"The Saudi scholarship programme has definitely heightened our interest in that part of the world," said Kenneth Holland, associate provost for international programmes. "Not only are the students fully funded, but they're also paying out-of-state tuition."
"It's an opportunity to increase understanding of Saudi Arabia for the United States and of the United States for Saudi Arabia"
Tom Farrell, Deputy assistant secretary for academic programmes at the US State Department
Kansas State has boosted efforts to court Saudi officials in the last year, flying administrators and department heads to the Saudi embassy in Washington. It's paid off: last month about 150 Saudi students started classes there, each funded to the tune of about $31,000.
Nail Al-Jubeir, a Saudi embassy spokesman, said 90 per cent of the 10,229 Saudi students the US State Department has registered for the fall semester will also get such scholarships.
By January, US government officials say the programme will expand to 15,000, which means Saudi Arabia will send more foreign students to the US than Mexico or Turkey. As funding for the scholarship programme expands, those numbers are likely to grow.
"This is a critically important bilateral relationship," said Tom Farrell, a deputy assistant secretary for academic programmes at the State Department. "It's an opportunity to increase understanding of Saudi Arabia for the United States and of the United States for Saudi Arabia."
College administrators say common misperceptions about the oil-rich nation make it crucial to create a tolerant environment for Arab and Muslim students, who have been singled out for scrutiny since the September 11 attacks five years ago.
So, as Kansas State students enjoy a string of home football games this month, they also are preparing for the campus' first celebration of Ramadan, the Muslim holy month.
"We really want to make this special. We're going to truck in halal food from Kansas City," Holland said. "The Saudi government is trying to place the students in a variety of institutions across the country, but where you get the competitive advantage is how you treat the students when they get here."
"Sometimes people ask me if I ride a camel to campus. They don't even realise how many cities we have in Saudi Arabia"
Marwan al-Kadi, who was active in the Muslim student association while he studied industrial engineering at Kansas State, said efforts to raise awareness about religious diversity have helped the new influx of students feel comfortable.
"Sometimes people ask me if I ride a camel to campus. They don't even realise how many cities we have in Saudi Arabia," said al-Kadi, lounging in a cafe near campus, as his cell phone rang intermittently. "I want to use the education to go back and work for my father's company."
But some officials say efforts to fast-track educational diplomacy with Saudi Arabia could use additional scrutiny. Clark Kent Ervin, a former inspector general of the department of homeland security, says the US government has yet to ensure proper safeguards are in place to do effective background checks on all applicants.
Yet for Allan Goodman, president and CEO of the Institute of International Education in New York, the new bilateral agreement is a “tremendously positive” step towards person-to-person diplomacy.
"These 15,000 students will really jump start education and that will be a great addition to the Kingdom," said Goodman. "At its base, it's about mutual understanding."