Shortchanged

If you are going to study abroad in the near future, expect to dip deeper in your pockets than what you’re used to. With the anemic dollar plagued by inflation and the U.S. stock market terrified of a recession, the international exchange rates have not been friendly to U.S. students. And IU students are unfortunately no exception. \nThe way IU has set up scholarships for overseas study isn’t helping students either. Upon analysis, it’s quite astounding how much the Office of Overseas Study shortchanges students. The scholarship amounts are fixed and range from $500 to $3,500 depending on destination and duration of travel. According to the Office of Overseas Study’s Web site, the last time the amounts were changed was in 2005. Just taking U.S. inflation into account, which averages 3 percent a year, a $3,000 scholarship in the year 2005 would have to be increased to about $3,200 in 2007 in order to buy the same stuff. However, the amounts are not adjusted, which means that the 2007 student has roughly $200 less than the 2005 student. \nNow, let’s take the exchange rates into account, and the picture for the 2007 student becomes \neven bleaker.\nLet’s take Europe, a popular study-abroad destination, as an example. Conveniently, it has a common currency. As of Jan. 27, the exchange rate was 0.68139 \nEuros to one U.S. dollar. That means that in 2008, $3,000 would convert to 2,044.17 Euros. In 2005, the average exchange rate was .80471 Euros to one dollar. This means that in 2005 a $3,000 scholarship would have been worth 2,414.14 Euros. So in 2007, the scholarship has decreased in value by almost 400 Euros. \nLet’s take it a step further and adjust for inflation. Inflation in Europe is roughly 3 percent. So, a $3,000 scholarship in 2008, for example, is only worth $2,155 in terms of real value. This means that the real value of the scholarship has decreased by 590 Euros, or $845. That’s about a two-week (or longer if you’re thrifty) stay in Rome.\nNow you can see for yourself why the system of fixed-amount scholarships is ridiculous. Over time, studying abroad becomes much less affordable because the amount that was sufficient in 2005 no longer covers the expenses of 2008. Scholarships must be adjusted for inflation and exchange rate pressures in order for IU to be able to claim that it supports and encourages students studying abroad. \nOn another note, the weaker the dollar, the more affordable it becomes for international students to study in the U.S. With president McRobbie’s recent travels to \nChinese universities and the currently weak dollar, we can expect \nan influx of even more Asian students to IU in the near future. With foreign students increasingly studying in the U.S., IU must reciprocally increase the number of its students abroad in order to remain globally competitive. The University can do so by setting up a better scholarship system.