Those studying abroad economize as U.S. dollar weakens against the euro

By Lauren Iacocca
DAILY BRUIN CONTRIBUTOR
liacocca@media.ucla.edu

The U.S. dollar to euro exchange rate has been unfavorable for Americans for some time now, and the dollar's relative value continues to decline.

Last February, one U.S. dollar was worth .927 euro; now it is worth .788 euro.

This is disappointing news for students who plan to study abroad in European Union countries.

"As the dollar falls, it ... discourages imports of educational services (American students going abroad to study)," said Daniel Mitchell, a professor of management and public policy at UCLA.

But this decrease in value is not enough to stop students from venturing abroad.

While Jeffrey Michels – a fourth-year political science and Francophone studies student – has been studying abroad in Paris, he said he has seen the euro skyrocket and the dollar continue to fall.

Originally his parents supported his plans to study in France because the Education Abroad Program costs were estimated to exceed the overall expenses of studying at UCLA by only $2,000. 
  
But Michels said he will have spent at least $9,000 more being in Paris rather than in Los Angeles.

"Nevertheless, I recognize how fortunate I've been to participate in this program and study in Paris and wouldn't change my decision, even in light of the new debt I will have upon graduating UCLA," Michels said.

One way to deal with the worsening exchange rate is to earn some euros, said Sean Donovan, a fourth-year English and French student studying in Toulouse, France.

"I have a job here as an English TA and I'm payed in euros, eliminating the exchange rate problem," he said.

Still, some exchange rate effects are unavoidable.

"If the euro remains at the current level versus the dollar, 2004-2005 EAP European program budgets may reflect higher cost," said Bruce Hanna, Director of Communications for the Universitywide Office of the Education Abroad Program.

"One positive aspect for those students receiving financial aid is that such an impact would be known in advance and would be reflected 'up front' in financial aid available," he said.

Even with the anticipated increase in the expense of studying in Europe, student demand is persisting and, often, even increasing.

"We don't seem to have students who withdraw or cancel their program due to exchange rates," said Lindsey Daltro-Schram, the interim administrative director for EAP, attributing this largely to the fact that students pay EAP program-specific fees to the UC in dollars.

Air travel to and from the location and, for a number of EAP programs in Italy, France, Germany and Spain, housing payments are issued in dollars directly to EAP rather than to the provider abroad.

"If students were actually paying program costs in euros, they would have to pay almost a third as much. But this is not the case," Daltro-Schram said.

To pay a third more for the program cost would be a huge amount, but the difference is negligible for a consumable item like a glass of beer, she added.

Where she thinks the unfavorable exchange rate really hits students is in travel expenses, she said.

Hanna agreed, adding that the biggest impact of local currency is on personal living expenses while in the host country, including travel, food and entertainment.

Thus, while an unfavorable exchange rate has not seemed to deter students from studying abroad, it has affected the way students live once they are abroad.

Jesse Biroscak, a third-year European studies student, is currently studying in Lyon, France through an EAP program.

"The unfavorable exchange rate is horrible," Biroscak said.

After returning home for winter break, she brought back $1,500 which converted into 1,160 euros.

"It feels like you are getting severely undercut," she said, adding that now she makes an effort to be frugal.

"I don't buy the little snacks to munch on during the day and I shop at the discount supermarkets. I'd probably do that anyway, but now I really look for the low prices," she said.

"Traveling is certainly expensive too, so I'm cutting back," she added.

Michels also said he is not taking weekend trips across the continent due to his trip's increase in cost.

Derik de Baun, a third-year French and linguistics student, plans to study in France this summer.

Two years ago, while in Europe, he was faced with a weak dollar compared to the euro.

"Now it's even worse!" he said.

De Baun plans to use what he learned from his past travels to save money.

"I expect to be wiser than the first time – I will utilize friends for free places to stay when I travel," he said.

He will also be certain to purchase a Euro-rail pass and make use of student discount cards, he said.

In addition to train and metro passes for students, free concerts and discounted tickets to operas and museums are readily available in Europe, Daltro-Schram said.

Daltro-Schram is optimistic for student travelers, acknowledging that in many ways, students actually save money when they are abroad. In Germany, a student can often get his or her own room in an apartment for 180 euro a month, she said.

Even with the exchange rate, this amounts to just over $233 – significantly less than the cost of a shared room in Westwood.

"Europeans tend to live more frugally than U.S. students," Daltro-Schram said.

When U.S. students go abroad, it is natural for them to adjust to the way their European colleagues are living, she said.

"Regardless of exchange rates, students who really want to go abroad will continue to do so," she said.

Source:  http://www.dailybruin.ucla.edu/news/articles.asp?id=27694

Published: Friday, February 27, 2004