Euro pinches student travelers

Students planning to study abroad in Europe within the next few
years may have to allocate a bigger budget in order to compensate
for the dropping rate of the dollar in comparison with the
euro.

The United States dollar has been quickly losing value against
the euro, dropping from .993 euros to one dollar in the beginning
of 2000 to the present rate of .795 euros to one dollar.

“The exchange rate has been very gradual over time, but at
one point you really only had to spend slightly more than $1 to get
one euro, and now you’re spending about $1.35 and maybe even
higher than that to get one euro,” said Professor Michael
Lofchie, chairman of the political science department.

Many study-abroad programs to countries within Europe have been
affected by the economic fluctuations as prices of excursions,
living arrangements and food have increased for American
students.

“The housing and meals are the responsibility of the
students, and those kinds of local expenses fall at a higher level
than they were four years ago in the European countries,”
said Bruce Hannah, a spokesman for the University of California
Education Abroad Program.

Lofchie and political science Professor Richard Anderson lead a
study-abroad program for political science students every summer
that has increased in price due to the falling rate of the
dollar.

“The main impact we’ve felt is that we advise the
students that they need to take more cash and money. We’ve
held the line by getting very good deals with the hotels and
cutting down on some of the side excursions, or one side excursion.
But now we advise students to have between $1,200-$1,400 of
spending money, when we used to advise them to have between
$1,000-$1,200,” Lofchie said. “Students have to spend
more money on food, laundry, souvenirs ““ the daily cost of
living has just gone up.”

“We’ve had to raise the price because we’re
billed in euros, and when the euro goes up we have to cover the
cost of hotel rooms and the other things we’ve paid
for,” Anderson added.

While the falling rate of the dollar has raised the prices of
study-abroad trips to Europe, it has not significantly affected the
enrollment rates of the programs, Anderson said.

“Normally when prices go up you’d expect enrollment
to go down, but that hasn’t happened. The interest in the
program is the same as it has always been,” Anderson
said.

The effects of the rate of the euro to the dollar are difficult
to determine because of other factors affecting enrollment of
students to certain study-abroad programs. For example, the current
deficits within the Californian economy are creating budget cuts to
programs such as EAP, meaning that the opportunity to study abroad
in California is now available to fewer students.

“There are differences in the last couple of years, but
it’s hard to determine exactly what factor accounts for the
changes. The biggest change that’s influenced us is the state
of California’s financial situation, which gave us a
requirement to hold the level of enrollment in EAP because it had
been growing in enrollment at almost 20 percent a year,”
Hannah said.

“It hasn’t been that clear and that easy to track
either. We are always working to provide the most exciting and
worthwhile programs we can, and different programs are available
any given year which may lead to increases in the number of
students in different programs. One can guess that the euro is
having some kind of impact, but it’s difficult to measure if
the euro is actually decreasing enrollment,” Hannah
added.

The increase in prices for Americans are not due to the increase
in the value of the euro but to the decrease in the value of the
dollar, and it is predicted that the dollar will not begin to rise
in value any time soon.

“The outlook for the dollar is not positive and I think
it’s going to get worse,” Anderson said.

Lofchie added that “the falling rate of the dollar is
because of U.S. budget and trade deficits and inappropriate fiscal
policy by the U.S. government. If the U.S. government does not do
anything about these horrific budget deficits, then the value of
the U.S. dollar will keep falling.”