Sticker Shock and Study Abroad

With the dollar declining, fuel surcharges rising, and an economy slowing, the impact on the number of Americans studying abroad -- and where they go -- could be significant.
March 27, 2008

Summer 2007 studying in France, not including trans-Atlantic airfare and Michigan State University tuition: $2,931. Summer 2008 in France: $3,385.

The difference: a dissuading one?

Study abroad administrators paying close attention to that question offer varying answers. But the general consensus seems to be that the economic downturn, high fuel surcharges on airfares, and decline of the dollar's value internationally have had only minimal impact, if any, on enrollments of American students abroad so far -- but that, looking to the future, there are real reasons for concern.

“We’re in what we call our critical period in that this is the time when students and their families are deciding if they’re going to stick with their plans or not,” Kathleen Fairfax, director of Michigan State’s Office of Study Abroad, said of the university’s popular summer short-term programs (including the above-mentioned program in France). “We’re still running above last year’s number for summer. But I don’t know what our peak attrition period is going to look like.”

“There is significant concern, and we’re wondering if this is going to be the year when we see a drop in the number of applications,” added Eric Lund, director of international and off-campus studies at St. Olaf College. The Minnesota liberal arts college, which sends about three-quarters of its students abroad, has seen stable application numbers, but officials are anticipating a possible downturn. After all, the cost of one four-week program to Italy and Germany increased by $1,000 over the last two years, from around $4,000 to $5,000.

“We’ve had this problem with the declining value of the dollar for a number of years now but if, on top of that, people have the feeling that they’re entering into a recession or wondering how families will manage with costs overall even in the U.S. -- I think there is concern that might create some kind of turning point,” Lund said.

"We're hoping not, but it looks like it's certainly a possibility."

This potential damper lingers amid enormous growth in study abroad nationally. The number of American students studying abroad keeps rising, with ambitious national goals (including a more than-quadrupling of participation to a million students) always on the field’s horizon. Although one of the national objectives -- to send more students to nontraditional destinations outside Europe, which in 2005-6 attracted 58.3 percent of all American students abroad -- may actually get a boost given the dollar’s weak value against the Euro.

“For a number of years, many of us in the field have been advocating for developing more programs in Africa, Latin America, South Asia, the Arab world, and that’s happening,” said Brian Whalen, president and CEO of the Forum on Education Abroad. “One of the outcomes of the declining dollar in Europe may be that students do look more closely at these other program options in other parts of the world."

In describing other outcomes or impacts of the downturn, many overseeing study abroad offices describe increases in program costs -- though still largely to the point that most students can bear them -- and cost-cutting strategies on the part of program developers. On Michigan State’s faculty-led programs, for instance, Fairfax said that some overnight excursions have become day trips. Increasingly expensive residence hall meals that students never much liked anyway have in some cases been eliminated. ("A lot of students in the past were already paying twice for meals anyway because they didn't like the dorm food," said Fairfax.)

At the University of Kansas, some seven week programs have been shortened to six, said Susan Gronbeck-Tedesco, director of study abroad there. At Kansas, application numbers are stable this year after years of growth – and for fall semester programs, 170 applications are in so far, a decline from 184 this time last year. (The priority deadline, Gronbeck-Tedesco said, was March 1, so the number at this point should be fairly stable.)

“We have 15 new programs, new short-term programs that we’re offering, so you’d think there’d be more students that are involved because we’re covering more academic areas. And the fact is that our student population is going to be stable for the first time in five years,” Gronbeck-Tedesco said. “I think it’s related to cost.”

“If there isn’t a recovery in the dollar in the next year, we’re going to have to increase our costs [further] and that does concern me. Because I think every time we increase our cost to students, it creates a group of students that don’t get to go.”

Other institutions offer more rosy projections, however. The University of Georgia’s director of study abroad, Kasee Laster, reported strong numbers for summer education abroad programs. “So far, we seem very much on track,” she said, adding that in Georgia, the state's full-tuition HOPE scholarship can be used to cover study abroad costs.

And Jaime Torres, director of the International Education Office at St. Louis Community College, added that he’s been surprised that the economic downturn hasn't had a greater impact on study abroad participation. “We’ve noticed the participation is slightly smaller than in previous years, but it’s slightly – we’re talking about ones and twos and threes,” Torres said. He attributed that, however, to the college’s long-term focus on keeping prices low, given the student population it serves. He said that in the six years since he arrived at St. Louis -- since well before this economic downturn began -- he’s focused on offering programs in less expensive locations. “I’m very conscious of ... helping develop programs that inherently will be less costly. We don’t have to go to Europe. I’m inclined to go to other places rather than Europe,” Torres said.

“Spanish we don’t have to go to Spain for. A Spanish immersion program we can always go to Central America or South America [for] and that’s where we go. It’s obviously cheaper,” he said.

“The dollar has been weak especially for Europe for a long time, and Europe’s been pretty expensive for a long time,” added Allan E. Goodman, president and CEO of the Institute of International Education (which releases a comprehensive survey of study abroad numbers each year and in its most recent survey, in November, reported an 8.5 percent increase among American students). “I don’t think it’s a new factor because people have had sticker shock at the price of a cup of coffee in Italy or Spain or France or Germany or a pint of beer in England for several years or more.”

“I wouldn’t say that at the moment this is overwhelmingly sensitive to economic drivers,” Goodman continued of education overseas more generally. “It’s always possible [that there could be a decline in enrollments abroad] and when there was the Asian currency crisis, Asian students were unable to come here and the numbers from Asia dipped. So that does happen. I think it’s too early to tell what impact any of this is going to have on Americans going abroad.”

“Each crisis, each currency crisis, whether it’s Asia’s or ours, may have a different pathology and may have different effects.”

Goodman did point out, however, the sticker shock students may experience upon facing unexpectedly high airfare and fuel surcharges -- a point that Michigan State’s Fairfax made as well. While a program in Africa, for instance, may be inexpensive as far as housing or food is concerned, “especially our Africa programs, it’s a good thing we can keep it inexpensive because for a lot of them we’re up to $2,000 a ticket,” Fairfax said.

The topics of increasing costs and a need for increased accessibility are attracting a lot of interest in the field, as are some related concerns, such as increasing capacity and determining ethical pricing structures for programs, said Whalen, of the Forum on Education Abroad (a legal challenge to one popular pricing model, the policy of charging students abroad full institutional tuition and fees, is pending against Wheaton College).

At a session Tuesday on hot topics in study abroad at the American Association of Collegiate Registrars and Admissions Officers annual meeting, in Orlando, the issue of cost was of great interest. One attendee reported a decline in faculty-led programs on campus, while a couple of the major study abroad program providers weighed in.

“We are seeing students choosing differently, toward universities with slightly lower tuition rates, and we’re seeing some migration out of city centers,” said Steve Seaworth, of the Institute for Study Abroad, Butler University. People might be choosing York over London.

And, as for the long run, added Dennis Dutschke, of Arcadia University’s Center for Education Abroad: “With how things are coming, I’m afraid we’re going to have some really serious problems.”

Doug Lederman contributed reporting from Orlando.


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