December 10, 2007

Study Abrod programs suffer due to dollar’s low value

Posted in Misc at 8:09 AM by Joe From Boston

With the dollar sinking lower and lower against foreign currency, study abroad programs are REALLY feeling the pinch, according to the Chronicle of Higher Education.

Read the excerpt below.  A paid subscription may be required to view the entire article.

Declining Dollar Has Colleges Scrambling to Cover Study-Abroad Costs

As the dollar dips to all-time lows, study-abroad programs are feeling financial pressure, forcing colleges to cut costs, tap reserve funds, or increase charges to students.

In the last year alone, the dollar’s value has tumbled 5 percent against the pound, 7 percent against the yen, 10 percent against the euro, and 14 percent against the Canadian dollar. Brian J. Whalen, president of the Forum on Education Abroad, an independent organization of study-abroad providers, estimates that the dollar’s performance has forced colleges’ study-abroad costs to rise 10 to 15 percent over the last several years.

Still, the dollar’s recent deterioration comes amid efforts to encourage more students to study abroad.  Especially worrisome, educators say, is that the dollar has taken one of its sharper slides in Europe, which absorbs some 58 percent of all American students who study abroad, according to the Institute of International Education.

Thus far, the dollar’s weakness appears to have done little to dampen American students’ enthusiasm for studying overseas. But study-abroad officials are concerned that a protracted decline in the dollar, which many expect, could preclude some low-income students from traveling abroad to study or shorten their visits.

The drop in the dollar, the officials say, may also accelerate trends toward study in nontraditional destinations, where a dollar stretches further.

Controlling Costs

Study-abroad administrators, however, are grappling with a more-immediate challenge: how to control costs for students already abroad and for those about to depart for January-term or spring-semester trips.

Setting fees has become a guessing game. Since the fall semester began, the value of the euro has increased more than 8.5 percent against the dollar, upending budgets.

“It wasn’t that long ago that I was budgeting for a worst-case scenario of $1.45,” Catherine C. Marshall, director of education abroad at Ohio University, said of the euro’s value late last month. “Yesterday, it was $1.48.”

And while no institution said it had plans to pull out of Paris or leave London behind, rising prices could further fuel a growing shift toward studying in less-traditional locations in Africa, Asia, and South America, where exchange rates are more favorable.

Mr. Bannister, of Cultural Experiences Abroad, says the number of students enrolling in his group’s program in Buenos Aires this coming spring is up 52 percent over a year ago, while those going to Prague, which has not yet converted to the euro, has increased by 150 percent.

“Paradoxically, there’s a good side to the dollar’s decline because it’s causing students to look at different
destinations,” he said.

But study-abroad officials say they worry that sticker shock could deter the very students they are trying
to encourage to study overseas – those from low-income households – from going abroad. Several
institutions say they are working to expand the amount of need-based aid available to students studying