The program was established to celebrate the 300th anniversary of German settlement in North America and has been renewed by both legislative bodies since its inception.
The scholarship program is merit-based and is funded based on the congressional district for Americans and Bundesland for Germans.
These selection committees then put forward the names of the best candidates to receive the scholarships, which are usually approved by the administering organizations.
Through CBYX's first decade and a half, Youth For Understanding (YFU) had been the primary administrative organization for the program.
YFU's organization administration of the CBYX program ended after the dissolution of the United States Information Agency (USIA) in late 1999.
After applying for the program, 150 potential candidates are selected to interview in their state of residence; Seventy-five candidates are then selected to participate in the program, which includes: This scholarship program sends graduating American high school seniors aged 18–19 (some with a vocational specializations and some from regular high schools) to Germany for two months of intensive language training followed by ten months of practical training and schooling in their field of interest.
The first two months are spent with the group in Bonn, Germany, where the students live with host families and attend a German language school and cultural excursions.
The following ten months are spent apart from the exchange group, where students live with host families in various cities or regions of Germany preassigned by the program.