Market crash in Southeast Asia affects students

The economic crisis in Southeast Asia has affected almost 300,000 students from Asian countries studying in America. At Williams, several of the 15 undergraduates and seven graduate students from this region have approached the College for assistance. These students come from seven Southeast Asian countries: Thailand, Indonesia, Malaysia, Singapore, Vietnam, Philippines and South Korea.

The economic crisis has caused the currencies of these countries to lose at least 40% of their value against the U.S. dollar. As the majority of students from Asian countries enrolled in U.S. schools pay full tuition, this devaluation of Southeast Asia currencies has forced many Southeast Asian students to withdraw from schools because of the lack of funds.

Director of Financial Aid Philip Wick said approximately four to six students have spoken with him about their financial situation. Bursar David Holland said two students from Korea have approached him with problems regarding the payment of their term bills. Assistant Dean Amy Pettengill-Fahnestock, the international student advisor, said she spoke with two students about how they were dealing with the financial situation.

Both Wick and Holland explained each student’s situation will be dealt with on an ad hoc basis, mainly through the use of monthly payment plans and loans. “At this point, we don’t have too much of a problem,” Holland said. “I don’t know what’ll happen as more people get involved.”

Student reactions

Although the problem may not affect a large number of students, those affected said they consider it to be serious. Of the students she spoke with, Pettengill-Fahnestock said she sensed they “were taking it [the situation] seriously, and seemed pro-active about it.”

One student impacted by the crisis currently is working with both the financial aid and bursar’s offices. John* said “the currency devalued 50%, the stock market has crashed, and we’re in recession. My parents have to pay double for my tuition, and this is a problem not only because of the devaluation of the currency, but also because of the recession.”

John continues, “My education is the first priority to my parents. That’s why I’m still here. They are doing their best to support my education.”

John said he is grateful the Bursar deferred his term tuition payment for two months, but noted, “They haven’t done anything else. I’m not too happy with it. I think the deferred plan is useful in the short-term, but in the long-term, I think the college should give us financial support.”

Another student, Joe*, also spoke on how this crisis is affecting him. “My tuition has become incredibly expensive…personally, I am trying to save as much as I can…but the money I save by doing this is not that much, the kind of money that students like me or others who are affected need is much greater.”

Joe described his experience working with the financial aid office: “They told me they were compiling a list of students they thought would be affected by the crisis. So I was a little hopeful, I thought maybe they would try to give some sort of help, such as loans. Anyway, when I actually went to see him [Wick], I was in for a major let down. He basically asked me to explain my situation and what I wanted, and then told me that no one knows what’s going to happen to the crisis in a few months.”

Joe acknowledged that the economic situation could get better. However he also said, “It [the economy] won’t go back to the original level, and what about the salaries that are not worth half as much…because of the currency devaluation? This means that my parents can’t save any [of their salaries] to fund my education next year.”

Joe expressed a general dissatisfaction with how the situation was handled. “Basically, [Wick] gave me an application for aid for international students, and said to try [to apply] but that he can’t guarantee anything. The general impression I got was: I am sorry about your problem, but take care of it on your own…we can’t help you. That’s the impression I got, and I don’t think I will bother applying for aid, because I think it will be a waste of time.”

Bob*, a student trying to obtain financial assistance from the College also gave his opinion on how the financial aid office is responding. “Basically, they [the financial aid office] didn’t assess correctly what was going on and was telling us [the students] don’t bother… The only thing they promised was to fill out the financial aid application for the next school year.”

“I was appalled at how they viewed the situation,” he continued. “It is a very serious situation that will affect me, my family, my country for years to come.”

Bob says he feels the College should come up with a definite plan that would help the international students. “When I applied to this school, I had to make a decision about whether or not to apply with financial aid. I decided not to because of the fear of lessening my chances of getting admitted… And now this economic crisis happens. And it was something totally out of my family’s control. So the college should definitely have plans to help out students. When I talked to Mr. Wick, he told me that the only time they give out aid to international students after they get admitted was when the primary income earner is deceased. But what about situations like this when your primary source of income’s paycheck has just got reduced by 60%?”

Mike* also voiced his concern. “I’m worried that if the situation continues to deteriorate, I would not be able to stay here [at Williams].”

He remarked on what he saw as the problem. “The basic problem is that they [the College] do not have any funds allocated to foreign students, except for eight international scholarships…The other international students I talked to ran into the same problems.”

In regards to the loan and deferred payment plans, he noted, “It does not make too much sense, because by the time I pay it back, the [currency] will have very likely depreciated even further, which would make the loan a burden too big to handle.”

“I was kind of upset that the school did not do anything about it, since they didn’t seem to have any plans or ideas for us, but at the same time, I’m not really sure what they could have done,” he said. “They [the financial aid office] were all very polite about the whole thing though.”

Mike said he is working on resolving the situation, and has gotten a job on campus.

In regards to the role of the school, he said “I’m not sure what the school should have done, I don’t know what their policies are. But, at the very least, I think they should have acknowledged the problem, and let us know that they were at least monitoring the situation. As far as I know, they had no contingency plan, or actually any plan if the situation becomes worse.”

School plans

Wick and Holland said this problem proposed both short-term and long-term issues for the College and for the students.

Wick stated, “The problem in the short-term is that some students are unable to pay their term bills. These students then have to decide what options there are, such as the already existing monthly payment plan, and the MASS loan plan.”

Holland defined the short-term as a “wait and see” situation. Referring to the payment plans and extra loans, Holland said, “At this point, this is how we approach the problem — personally, I think that if it gets worse, William and other schools will really have a problem.”

In the long-term, the problem that might arise is if
there are students who will not be able to return to school in the fall. One suggestion Wick had in response to this potential problem was to allow international students to apply for financial aid. However, Wick also noted that it is “difficult, if not impossible to allow them [international students] apply for financial aid.”

Wick explains the difficulties involved in calculating financial aid for these students. “It is hard to evaluate the assets, real estate and other holdings of these families, especially with the fluctuation of the exchange rate.”

It is not the policy at Williams for international students to apply for financial aid. International students are considered for the Haystack Scholarships, which Wick said are given to selected students and are based on need. There are approximately six Haystack Scholarships awarded each year.

Pettengill-Fahnestock said she is uncertain about the extent of this problem on campus. “I don’t know how many students are having problems, I’m not sure of the scale of the problem. It is conceivable that the problem is larger than I’m aware of. I think that people should speak up and make students aware.”

“Also, I think that students are also in the wait-and-see syndrome, to see if the situation will improve before they make any big decisions.”

Pettengill-Fahnestock has been helping the College deal with this situation by gathering information about the possible ways other schools have been dealing with this situation. Possibilities such as helping students find on-campus employment, assisting students get permits for off-campus employment, emergency loan programs with local banks, special cases of lowered tuition and deferred payment programs, are all possibilities being considered by other schools.

Other reactions

Despite the serious financial problems some students face, there are also students who have been affected only minimally in terms of financing their education in the United States.

Currently, there are several students from Thailand attending Williams as Royal Thai Scholars. Although Thailand is suffering economically, this fund will continue to support students already attending universities in the United States and have not cut their monthly living allowance. However, the economic situation has forced the Royal Thai Embassy to cut funds for students next year.

A freshman from Korea noted, “Actually, I am not affected by it [the economic crisis] as much. Although my parents will probably have to pay twice to exchange the currency, I am a permanent U.S. resident now and I am on financial aid and my tuition is already paid.”

Approximately one-third of the students at the Center for Development Economics are from Southeast Asian countries. The students are sponsored by their government and home institutions. According to Pamela Turton, Assistant to the Chair of the CDE, the sponsors make tuition payments in September, and so the economic situation “has not caused anyone to drop out this year, but it may become a problem with students from those countries next year.”

Antonius Hardyanto, a CDE student said, “of course I’ve been affected [by the crisis]…the price of basic goods in Indonesia have increased by 50%. Luckily for me, I’m sent [to the CDE] by my government, and my living allowance is the same as before.”

Hardyanto expressed the uncertainty of his position. “I am financed by the central bank in Indonesia, and there is the possibility the president may dismantle the central bank…if this happens, I feel there is a great danger in terms of making me go back to Indonesia as I will no longer have a sponsor.”

Hardyanto is planning ahead, attempting to save part of his living allowance.“This way, if they cut my monthly living allowance, I can live off my savings and stay at Williams long enough to finish my program.”

Another student at the CDE, Jinna Tansaraviput, from Thailand, explained, “this situation is not really affecting me, since my government is sponsoring me. They haven’t cut my allowance yet… but I heard that they have deferred students for next year, because they don’t have the budget for them.”

Part of the effect of this situation at other universities is the admission and enrollment of Southeast Asian students. A large percentage of Asian students receive no aid from the universities they attend, and this had decreased the number of students applying for admissions. Accepted students also have to prove they have the resources to finance their entire education.

Dean of Admissions Philip Smith has not noticed any changes in admission statistics of international students. “The [application] numbers look similar to those of previous years.” He cited though, that there may be several reasons for this. “First, this may be attributed to the fact that Williams does not have a large number of international students.” He also pointed out, “Many students tend to make up their minds as to which schools they apply to as early as June or July. The financial situation back then may not have been as serious. I don’t know of any reason why they would change their minds [about which school to apply to].”

However, Smith noted that Williams has offered a waiver of the application fee to international students, seeing “no need to burden them with such a big fee to apply here.”

*Due to the nature of this article, students marked with a star wished to remain anonymous.