Think the lofty $46,860 that Tufts - and many private colleges - charge per year is making a dent in your parents' wallets? Try spending a semester or two across the Atlantic, where the falling value of the dollar and the surging Euro are combining to create higher living expenses for American students.
As of September 21, 2007, the U.S. dollar had dropped to equal the value of the Canadian dollar for the first time in over 30 years, according to the New York Times. It also fell to a new low against the Euro - the official currency of 13 European states, including the likes of France, Germany and Spain - which crossed the $1.40 mark for the first time in its nine-year history with a new value of 1.4065 U.S. dollars.
While the plummeting dollar is certainly making its mark on Americans within the United States, it is also heavily impacting an increasingly prevalent sector of college students: those who decide to study abroad in countries whose currencies continue to gain strength against the weakening dollar.
Tufts Economics Department Chair Enrico Spolaore explored the basic economic reasons behind the falling value of the dollar and the effects it could potentially have on students traveling abroad. He cited the U.S. housing crisis and the resulting reduced interest rates as a factor in the weak value of the U.S. dollar, which subsequently impacts the costs of buying goods.
"The value of the dollar makes foreign goods and services very expensive to Americans," he said. The inverse is also true, he said, making American exportable goods extremely cheap to buyers in European countries.
What's important to consider, according to Spolaore, is the currency in which a person receives his income. For instance, even when students' residencies have shifted to a foreign country, they're still relying on money made in American dollars.
"If you're a student, your income is in dollars," he said. "Say you go to France, everything is more expensive for you. If your family is from Europe, they will find everything cheaper here ... It's not the nationality of the student that matters, but what your income is denominated in."
Tufts students currently studying in Europe are feeling the bite when it comes to their spending habits. Stacy White, a junior studying in Spain, has been keeping an eye on the exchange rate.
"We've been watching the exchange rate get worse every day," she said in an e-mail to the Daily. "Just when we think it hits bottom, it gets worse."
Junior Sarah Schreiber, who is also in Spain, noted that a combination of small purchases can quickly add up.
"Everyday items just become a lot more expensive: A 1- Euro cup of coffee ends up costing almost $1.50," she wrote in an e-mail. "And when you add up all the small purchases you make in a day, it gets really expensive."
The story in France is no different, according to junior Courtney Kline.
"The last time I checked, the exchange rate was $1.46 per Euro," she said in an e-mail. "Of course, I am astonished at how much some things cost over here."
For junior Jenna Hartman, the exchange rate played an important role in deciding which destination to choose for studying abroad.
"Initially, I was planning on studying in London, but I decided not to solely based on the awful exchange rate there," she said in an e-mail.
Instead, Hartman opted to study in Florence, Italy, where the strength of the Euro is still producing an effect.
"The exchange rate is affecting my lifestyle in that here, I am much more money-conscious than I am at home, as it is easy to spend a certain amount of Euros without realizing that it is 1.5 times the dollar," she said.
But the Euro isn't the only currency that's gaining ground against the dollar, according to Spolaore, who cited the appreciating values of currencies in Latin American countries such as Colombia and Brazil, along with the Japanese yen.
"The weak dollar is a worldwide phenomenon," he said. "But the Euro is the most dramatic."
While the exchange rate is impacting the day-to-day spending habits of students once they arrive at their study abroad locations, Associate Dean of Programs Abroad Sheila Bayne is not concerned about its potential to discourage students from deciding to study abroad altogether.
"The dollar has been falling for some time now, for a number of years ... and it does not seem to affect the number of Tufts students going abroad," she said.
Bayne explained that studying through Tufts programs abroad can help students avoid paying inflated foreign tuition prices.
"For students who go to our Tufts program, this [the value of the dollar] is not a problem. It might be a problem for the university, but the commitment that we have in making our own programs is that these programs will be available and will be the same quality for a student who goes in the year 1999, 2000, 2001, 2007 et cetera," she said. "In other words, if there is an exchange rate variable, the university will take the hit, so to say."
Professor of Economics Anna Hardman proposed that the gradual cheapening of goods and services in America could raise the appeal of studying in the States.
"It will be interesting to know whether applications from Europeans to study at Tufts or that do study abroad in this country have actually gone up," she said. "Because suddenly Tufts is cheaper if you can get more dollars for your Euro."
Spolaore also noted some advantages of the weak dollar.
"In the short run, it helps exporting goods and services. It makes American goods cheaper and attracts tourists and foreign students," he said. "So there are winners and losers in [the United States]."
For students preparing to go overseas in the near future, the exchange rate is largely seen as an inconvenience rather than a deterrent. Sophomore Rise Navre, who plans to spend her junior year in the United Kingdom, has joined many students who have gradually earned a disposable income in the United States specifically for the purpose of spending time abroad.
"I worked this summer, just saving up money and trying to spend as little as possible," she said. Navre spent a month in the United Kingdom as a high school student, when the rate was $1.73 per pound.
"It's just gotten worse since then," she said. "[Next year] is going to be an expensive year."
But Bayne is skeptical that a further drop in the value of the dollar will hinder students from studying abroad.
"I doubt it very much," she said. "I think it will mean that people will have fun in ways that don't cost as much money, but I don't think people are going to stop studying abroad. That has not been the trend."
