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Institute of
International Education
809 United Nations Plaza
7th Floor
New York, NY 10017
USA
Tel: +1 (212) 984 5367
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Along for the Ride: Economic Decline’s Impact on Study Abroad |
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By Chris Musick
This article is based on a snapshot survey conducted on behalf of the NAFSA Education Abroad Developing and Managing Programs Abroad Network from February 16 to March 22, 2009 using an on-line SurveyMonkey application and promoted through the Secussa listserv. Over 160 international educators completed the survey. Forty-eight percent of the respondents were from 4-year universities, 18% were program providers, 11% were from master’s level universities, 8% from doctoral universities, 10% from research universities and 4% from 2-year colleges. Forty-five percent of respondents admit students from their own and guest universities. Forty-two percent admit only their own students. Results show an approximate 50-50 split on rising and declining enrollments. Respondent comments reveal measures being taken to combat declining enrollments. A follow up survey is planned to examine fall enrollment trends.
“We are baffled by the increase in summer [study abroad] enrollment,” writes an advisor at a four-year college.
This feeling was echoed by many of the respondents who completed the “Economic Impact Survey” recently conducted on behalf of the Education Abroad Knowledge Community at NAFSA. One hundred and sixty-two international educators took part in the survey whose complete findings can be found at: www.nafsa.org. (You do not need to be a NAFSA member to view the results and participate in the discussion.)
It is counter-intuitive for study abroad enrollment to be increasing when the economy is in a downward spiral. Writes one advisor, “I've been feeling increasingly awkward saying to my dean, ‘No, I really don't think the economic crisis is having an impact on study abroad enrollments....’ afraid I've been missing something!” A respondent from a research university writes, “I am still waiting to see the actual participation rates drop as a result of the financial crisis. As of yet, this has not happened.”
Forty-eight percent of those who completed the survey say applications for summer programs is either equal to (27.4%) or exceeding (20.7%) those of last year.
However, the declining economy is having an effect on 52-percent of respondents. About 18-percent of respondents are experiencing a slight decline in summer applications. Respectively, 10-percent of respondents are experiencing either a 10- or 20-percent decline. As one master’s level institution advisor wrote, “Students are scared, [or] at least their parents are, about how to finance their study abroad experiences.” The same person is expecting “VERY BAD numbers for the fall. We are experiencing a 30 percent decline in applications.”
But are declines a result of the economy? “There seems to be a normal ebb and flow of enrollments at my school. So it's difficult to determine if the downturn is because of the economic situation or if it's ‘just time’ for a lower enrollment,” writes a person from a master’s level institution. Enrollments on faculty-led programs, according to another advisor, “depend heavily on who is leading a particular program.”
Decreases in study abroad enrollment are also caused indirectly by institutional cuts to study abroad and the lack of marketing and service which result. “We have had to reduce staffing in our office due to budget cuts. As such, our availability of hours to see students has been heavily impacted and this may have some negative effects on numbers later this year,” writes one respondent. Declining endowments are eating away at scholarships and office budgets. “We have a 20.6% reduction in the state institutional funding,” writes an advisor. “Endowments have declined dramatically to the point that commitments for scholarships for on campus programs may be exceeding the endowment returns and in some cases the endowments may in fact have lost principal. The dynamics of funding for study abroad participation are not clearly understood at this time.”
Eroding institutional endowments are forcing changes in how aid is awarded. “Our institution decided to eliminate institutional aid from study abroad. This is affecting some students’ ability to finance their program.” One institution has decided to limit the number of students who can study abroad. “We need to develop alternatives on how to limit the number of students that participate in study abroad….what [are] other institutions that send institutional aid abroad with students doing in the light of dropping endowments and the economic downturn?” Several respondents noted the need to protect their institution from lost funds which would otherwise leave the campus.
The president at one university is using “discretionary funds to promote need-based scholarships” for institutional sponsored programs. Capital campaigns are being launched to help fund study abroad scholarships. One university is contacting previous donors to renegotiate the portability of scholarships to study abroad.
Regardless of hard times, many people wrote that there is still increasing interest in studying abroad. Students and parents are asking more questions about options and affordability, and respondents are seeing an increase in scholarship applications. Nearly 69% of the survey respondents are seeing an increase in questions concerning cost and financial aid. Forty-seven percent are seeing increases in applications for aid. “Virtually every student,” writes one advisor, “is asking about financial assistance and commenting on the cost concerns.”
Advisors are identifying “study abroad sites that after all normal expenses cost about the same as being on the home campus.” As one respondent writes, “We are developing programs that are cheaper in price. An example is instead of Paris, go[ing] to Montreal to study French.” A program provider states they have “seen a shift from Spain to Latin America and from the United Kingdom to Australia that probably reflects slightly lower cost.” “Phone calls regarding financing, payment methods, and financial aid have increased from students and parents forcing advisors to have the ‘money talk earlier’ than they have had in the past.” Advisors are increasing communication with students: “We are working on doing a better job of communicating what is included in the program fee and helping students compare that with what they are spending on campus.”
Some universities are “doing it themselves” by circumventing outside providers to cut cost. “We are looking at more inexpensive locations for our short-term programs and taking out a lot of the guided tours and doing more of the self-guided tours and using more public transportation.” Other institutions are utilizing more direct enroll opportunities with universities abroad and creating exchanges where tuition is pegged to that of home to lower cost. Another advisor writes, “Most of our semester programs are direct exchanges where the change in exchange rates is helping our students.” “More students going on exchanges,” writes a respondent. She continues, “New exchange agreements have been made that take into consideration a student’s major. I believe this is the reason for growth.” Families can save money by sending their students abroad. One advisor notes, “Students have been shopping around and found in some cases that a program abroad for the semester is less expensive than staying home.”
One public research university advisor writes, “Some of our students tell us they have struck deals with their parents. Their parents will pay for them to study abroad since they will be saving on the overall expense of college by attending a public research university.”
Private colleges are being creative as well. “Our college decided not to charge our own tuition; instead students will pay the actual program fee. For some locations, students are paying less than what they pay to attend our college.”
To lower cost, program providers are waiving or lowering application fees, decreasing penalties for students who need to withdraw for economic reasons, “extending deadlines, keeping [program] cost stagnant, asking for price reductions at host institutions, and eliminating excursions.” The actions of providers have not gone unnoticed. “I appreciate the program providers who have indicated efforts to keep prices the same or even less than before so that my financial aid officers do not panic about all the institutional aid leaving campus.”
It is difficult for some providers to lower cost, “Our costs are already so close that it is hard to reduce them anymore. We are reanalyzing the margin we put in (usually 2%), reducing exchange rates, and cutting corners wherever possible. We are also letting programs go with fewer students.” As one provider puts it, “We already run a pretty tight ship. There’s not much we can do.” Institutions are in the same dilemma, “I’d love to lower the prices but that’s not feasible with our faculty-led programs. They must fully support the program or it doesn’t happen.”
The increased strength of the dollar abroad is a silver lining in the dark economic cloud. Writes one advisor, “I have been greatly surprised at the increased numbers of students applying for programs and think it is because of the favorable exchange rates and lower cost airfares.” Even though the strength of the dollar abroad is making Europe and the UK more affordable, one respondent states that students are choosing “a location to study where the dollar goes a little bit further.”
Responses to the survey are mixed with regard to the status of fall semester enrollments and to what lies ahead in study abroad. The vast majority of respondents say it is too early to tell how enrollments will shake out. An advisor at a four-year college states, “We’re praying we break even with last year’s numbers.”
Many of our job descriptions contain a line about the ability to work in ambiguous situations. With the uncertainty of institutional budgets, declining endowments, changing exchange rates, cost cutting measures on programs, and roller coaster enrollments, ambiguous times have arrived. Like my colleague, I am baffled but believe hard times force us to look at underlying values and plant the seeds of creativity. I look forward to seeing where this ride takes us.
Click here for an in-depth response summary of the survey featured in this article.
Christopher Musick, Director of International Academic Services at the University of Mary Washington, began his international career in 1984 and spent more than 20 years working advising international and American study abroad students and directing several offices. After earning a bachelor’s degree in Philosophy and master’s degree in Anthropology, College Student Personnel Administration and Teaching English as a Second Language from Ball State University, Musick lived, studied and worked in Japan for five years. Musick is the founder of the One Person Office Interest Group within the Association of International Educators (NAFSA) and frequently presents papers or conducts training at conferences. Musick received a Fulbright grant to research higher education in Germany and an IFSA Foundation Grant to establish the Cultural Envoy Program.
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