Students scrutinize new tuition plan

Many students have voiced unease about the dual-currency tuition scheme[/caption]

Returning students who logged onto the Banner Self Service website in late August were surprised to find that the university had implemented a financial mechanism in which “tuition is expressed half in pounds and half in dollars”.

Underlined in bold, red letters, the sentence goes on to read “all Egyptian students may pay in either currency or in both, according to the prevailing rate set by the Central Bank of Egypt on the day of payment”.

For the first time, AUC set tuition fees in the two currencies. However, only Egyptian students may pay the full amount in Egyptian pounds, factoring in the exchange rate.

“The reason for the expression of tuition in dual currency is to mirror the fact that the university uses both Egyptian pounds and dollars in its operation,” said Brian MacDougall, executive vice president for administration and finance.

“Prior to 2015 all of the exchange rate variation was borne by the university,”

Vice President for Student Affairs, Khaled Dahawy, finds it “unfair for the university to carry the risk on its own.”

He then added that this decision is long overdue.

“AUC, for many years, has been suffering from the foreign exchange problem,” he said.

Dahawy added that with the change in the socioeconomic factors that Egypt and AUC are facing, it has become very hard, if not impossible, for the university to sustain operations.

He explained that expressing tuition in foreign currencies is common nowadays and all international schools in Egypt do the same, adding that the board of trustees and the administration of AUC felt that it would be “too much to place the full burden on students.”

“Since we believe we are all one big family: the parents, the students, the administration, and the faculty; we wanted to share the risk. So, the denomination is only 50 per cent and, to make it easier, payment can be made all in Egyptian pounds,” he further added.

Yasmin Abu Bakr, an accounting senior, said, “The new billing system is too complex and creates a lot more confusion than necessary. As we have seen, students are having a hard time dealing with payments this semester”.

“It seems like a way for the university to trick us into paying more than usual,” she added.

MacDougall told the Caravan that the system wouldn’t solve the budget deficit problem.

It is for “managing the risk associated with currency fluctuation,” he added.

Hassaballah El-Kafrawy, Vice-President of the Student Union (SU), however, said that the new billing method is necessary for the budget deficit.

The official budget deficit is $1.15 million for fiscal year 2015, while the university’s operations are worth almost 190 million dollars per year, according to MacDougall.

“I am concerned that my tuition fees are now at the mercy of the fluctuation of the exchange rate,” said Sarah Shawky, an economics senior.

MacDougall said that if there is a very mild change in the exchange rate no one is going to feel the increase.

He then added how a devaluation of any currency triggers an increase in inflation and thus expenditure, which would translate into pressure on the university’s budget.

“You can’t look at exchange rate independent of everything else. But what you can do, is what we’ve done: introduce a formula that balances and shares the risk,” MacDougall added.

Kafrawy said that the administration did fulfill the agreement of the 2.3 percent increase, however students now pay EGP 750 more due to the fluctuation of the dollar.

The SU received complaints from students about the new system, which the student government recognizes as “legitimate concerns”, Kafrawy said, adding that the concern is about the principle and not necessarily the increase itself.

Kafrawy added that the SU is monitoring the new system closely and they – along with the previous SU administration – have intervened from the very beginning.

“Our concern is that the students are the ones carrying the load of the solution to the problem,” Kafrawy said.

He added that the dual billing system will not stop till the deficit is covered.

MacDougall told the Caravan that the change is already successful, but Dahawy said that it is too early to tell, “the numbers are not in yet,” he added.

“At the end of this year or the next year, we’ll see if it was successful or not,” Dahawy added.

Both Dahawy and MacDougall told the Caravan that the dual billing system is a permanent decision.