AUC Moves to Alleviate Community Fears over Devaluation
Reporter: Darin Hany
Editor: Mariam El Sayed
There’s one topic that has the AUC community rattled – currency devaluation.
The first wave of the Egyptian Pound’s devaluation by nearly 17 percent took place earlier this March raising concerns among students about the impact that would have on tuition fees and pushing the university administration to explore means of alleviating the financial burden on the community.
In a November address to the community, President Ahmed Dallal said that the university’s first and foremost objective is to offer help for those who need it most.
“Our priority has been and continues to be, to support those in our community who are most impacted by the devaluation,” Dallal said.
The concerns are not local as the global economy reels from several punches including the financial crisis of 2007, recession, slowing growth, the impact of the Covid-19 pandemic and finally the Russian invasion of Ukraine.
Russia’s blocking of Ukrainian exports of wheat and grain has severely impacted reliant regions such as the Middle East, including Egypt, Africa and Asia.
Film junior Mahmoud Zenhom believes that the economic crisis is hurting all Egyptians, irrespective of social standing.
“I have a friend of mine who joined AUC when the U.S. dollar was worth 18 EGP and now the U.S. dollar is worth 25 EGP, so now she has to pay almost EGP 250,000 per semester and her parents will not be able to provide for her during the upcoming semesters. It’s a tragedy,” he said.
Chair of the Economics Department Dina AbdelFattah explained that the government decided to ‘float’ the local currency to pay bills, including public sector salaries, as its income revenue stream weakened.
“To close this financing gap, the government secured a loan from the IMF. This means the forces of supply and demand will determine the price of the currency. A floating currency should witness different values according to the season of peaks and troughs with sources of foreign currency,” AbdelFattah told News@AUC.
In late October, the EGP devalued from about 19.60 to the dollar to somewhat stabilize at 24.60 a month later – a more than 23 percent decline in value.
The administration had already been planning for the occurrence of the second devaluation as it was anticipated by economists and discussed by the International Monetary Fund (IMF).
“When we planned for last year’s budget we planned for this eventuality because everyone was saying that the devaluation is not over, that the last wave was going to be followed by another wave, everyone was expecting this, the negotiations with the IMF were ongoing, so we planned and prepared ourselves,” Dallal explained.
He reassured the students that the university will not put them at risk.
“We stand firmly committed that no student will be unable to finish their education due to the inability to pay,” Dallal asserted.
As a response to the devaluation crisis, the university’s senior management created a fund to meet the current needs “current registered students (Undergraduate and Graduate) whose outstanding balance for fall 2022 was subject to the post-devaluation higher exchange rate”.
The Student Tuition Emergency Fund application was available on the Banner Self Service on November 2 with an application deadline of November 15.
This fund allows the AUC community to minimize the impact of the devaluation on the tuition fees by subsidizing some of the increase
“The day of the devaluation, the university leadership met, and as we anticipated that this was going to happen, we had in our budget an Emergency Tuition Fund that we deployed right away and we opened the application for the students who need that fund, and almost all applications received got processed,” said Dr. Ehab AbdelRahman, AUC Provost.
Some of the students say the subsidies offered are not enough to relieve the financial burdens of the third installment of tuition fees that ranges from $3,000 – $4,000.
“I got 100 USD and I think it was too little, but there are people who need more. However, it definitely helped pay the last installment and its good to know that the university wouldn’t let someone not continue due to financial issues,” said Laila Saeed, a Computer Science Senior.
The university’s leadership says it is aware of the magnitude of the current situation and has put in place mechanisms to ensure immediate action.
“We told the Financial Aid and Scholarships Office that this is the time when all hands are on deck, that we have to all work closely of us, including the people in my office to make sure that we process those applications on time and lessen the stress on the students and their families,” AbdelRahman said.
The students most impacted by the devaluation are those on scholarships and receive a stipend, which is their monthly allowance from the university.
Since the stipends are denominated in Egyptian pounds, they might not suffice in fulfilling the needs or monthly expenses of the students.
“The stipend increased during the first wave of devaluation. However there hasn’t been a step towards increasing the stipends since the second devaluation hit,” said a scholarship student who prefers to stay anonymous.
The student said that dorm residents in particular are suffering because of the devaluation and that the stipend runs out before the month is over.
“Definitely the stipend is an important part, there was actually an increase in stipend a couple of months ago that was in place before I came to office,” said Ahmed AbdelMeguid, AUC Associate Provost.
AbdelMeguid emphasizes that the university’s leadership is taking into consideration that the stipends might need to be increased once more in order to ensure that students on scholarship are able to go on with their daily lives and purchase their basic needs.
Senior management is aware that the current response is short-term and are focusing on plans for next year.
“I think the next important step we need to focus on is planning for next year’s budget. We are working on different scenarios and analyses to our operation and this will be reflected in our budget assumption for next year,” said Amir Habib, Chief Financial Officer of AUC.
Other members of the community agree with Habib, saying that the challenges go beyond tuition fees.
“This does not only involve the tuition fees, but also any out-of-pocket cost that is associated with education, like transportation, supplies and stationary, and others. Devaluation has generally reduced the value of the pound and therefore everything now is relatively more expensive,” said AbdelFattah.
Meanwhile, staff and faculty say they are feeling the bite of the devaluation on their livelihoods. The university did provide a one-time payment equivalent to two months salary in the November payroll, but excluded those at the top 20 percent of the payroll, including senior administrators and faculty.
“The problem still remains because this is a short-term solution and most of the staff members salaries are denominated in Egyptian pounds,” said AUC staff member Nouran Ahmed,
“There is a chance that a third wave of devaluation will happen within the upcoming months.”
