The Fluctuation Effect: Currency Exchanges and the Cost of Education

International students buy into an education market where their purchasing power has the potential to swing wildly. The sticker shock for students studying abroad can thus be considerable. As currencies rise and fall against the dollar, students and their families can, by year’s end, end up with a bill very different than what they were expecting.

To understand the impact of currency fluctuations on students, we decided to map the rise and fall of tuition costs for students from key countries over the course of the 2015/16 school year. We used a cost-estimate of $46,559.60, which we based on listed tuition fees at the top ten hosting institutions for international students in 2015/16.[1]

Over the course of the 2015/16 school year:


How Much Do Currency Fluctuations Affect the Cost of Education for International Students?

This “fluctuation effect” has very different ramifications for students depending on their needs, relative sensitivity to cost, available budgets, and ultimate expectations on what types of returns – in terms of eventual career outcomes, earning potential, etc. – they may see on their investment in obtaining a U.S. degree.

The effect for many Chinese students for instance, may be minimal. In 2015, a WES survey of master’s-level international students in the United States [3] found that among Chinese respondents, especially the roughly 58 percent could afford fees of more than USD $40,000 a year, cost was largely an afterthought[2]:

For these students, an additional USD $3,000 and change in fees is likely very manageable.

The picture was different among Indian respondents, a significant portion of whom had far less to spend on their educations than Chinese students,.

For these students, an extra USD $2,100 is a considerably greater burden than it is for their Chinese counterparts.

Mexican students are perhaps, even more likely than other cohorts to be affected by changes in the value of their home currencies. As highlighted in a recent WENR article [4] by Stefan Trines, the number of middle income households earning an annual salary of between USD $15,000 and $45,000 reportedly more than quadrupled within the past 15 years [5], and now account for about 47 percent [6] of all Mexican households in 2015.”

Despite this increase, the amount of disposable income in Mexico is still small when compared to average tuition fees in the U.S. and the economic situation in Mexico likely makes students, en masse, more sensitive to price fluctuations than international students from other top-ten sending countries. Students wherewithal to withstand the steep decline in the value of the peso against the dollar maybe yet another reason – in addition to new political frictions  between the  U.S. and Mexico – that we have begun to see a drop off in enrollments.

Similarly, as many as 90 percent of students from Vietnam, often seen as a key emerging market [7] for recruiters in the United States and Canada, are self-funded [8] – a reason that likely accounts for the heavy prevalence of Vietnamese students in U.S. community colleges, which are far more affordable than most universities.[3] Thus, although the price fluctuation for Vietnamese students was comparatively small at an extra USD $1,003.67, it may well have had an outsize impact.

Currency Fluctuation in Action

The 2016 Nigerian Forex Freeze: Between the start of 2016 and mid-March of the same year, the Nigerian Naira lost roughly 40 percent of its value, and in March, the Nigerian government announced the cancellation of its Forex system. The action had an immediate impact on Nigerian students enrolled at institutions abroad. In January, some 375 such students petitioned the Ministry of Education to cover unpaid tuition and other fees. Anecdotal reports in the Nigerian media at the time said that affected students in countries such as Russia, China, Ukraine, Cuba, Hungary, Egypt, Morocco, and Algeria faced “perpetual hardship, starvation, and hunger” due to the combined effects of devaluation and the inability to exchange currencies. (Read More: “How will lower oil prices affect international enrollments from OPEC countries? [9]”)

India’s Notebandi Maneuver: On November 8th, 2016, Indian Prime Minister Narendra Modi announced plans to devalue all 500 and 1000 rupee notes, in an attempt to crack down on illegal financial activity. The plan, often referred to as “notebandi,” took effect midnight that night, and the people of India were to exchange all affected notes for smaller denominations within 50 days, lest they be left with nothing but valueless paper. The government closed banks and ATMs for the next two days. When they reopened, huge crowds rushed in, and many had to wait hours for the opportunity to exchange their notes. India had a cash shortage on its hands. For a country in which 95 percent of transactions are cash based, and only around 50 percent of the population has a bank account, this was devastating. The devaluation did not achieve its desired effect of slowing black market activity, and many criminals actually seized the opportunity to launder their money through fake bank accounts, corrupt bankers, and physical threats. Such draconian financial policies create additional uncertainty for students studying or hoping to study abroad [10].

Considerations for Higher Education Institutions

Cost is just one among many factors in international students’ decisions about where to study, of course, but it has a significant role. Understanding the real-world impact of currency fluctuations on students’ ability to succeed academically or to persist in their studies is also critical to anyone focused on providing effective pre-enrollment counsel or on-campus supports to foreign students.



1 These included: New York University, the University of Southern California, Arizona State University, Tempe; Columbia University; University of Illinois, Urbana-Champaign; Northeastern University, Boston; University of California, Los Angeles; Purdue University, West Lafayette; Boston University; University of Washington.
2 WES Research, “How Master’s Students Choose Institutions: Research on International Student Segmentation,” Lu, Schulmann, October 2015
$1,661 a year in tuition and fees [11], compared with the more than USD $5,900 that non-California residents, including international students, paid for full-time coursework in 2016/17. Vietnam is, behind China, the second leading country of origin for the almost 100,000 international students at U.S. community colleges.