Worldwide financial crisis jeopardizes student loans

College students from outside the U.S. run into a financial aid cash crunch

By Christian Gaston

The Forest Grove News-Times, Nov 19, 2008, Updated Oct 30, 2009 (1 Reader comment)

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When Kelly Wild decided she wanted to be an eye doctor, she cast her gaze on Pacific University in Forest Grove.

Things were going swimmingly for the 36-year-old optometry student from Regina, Saskatchewan until September, when CanHelp, a financial aid group that helps Canadian students secure college loans suddenly cut off her cash supply.

It turns out that CanHelp was backed by Wachovia Corp., the troubled North Carolina bank which fell victim to the teetering U.S. economy in September and was gobbled up by Wells Fargo.

Wild was able to secure a $20,000 loan from her Canadian bank, but that only covered two-thirds of what she’d been counting on. “It’s kind of daunting,” Wild said. “You’re in your last year of schooling and you’re $10,000 short.”

Wild said she’ll be able to get through this year by scrimping and saving — she’s too far into her degree to quit.

“For me, I’m six months away from graduation and nothing’s going to stop that,” Wild said.

Staying home

Wild’s predicament isn’t uncommon. International students around the metro region are quickly realizing that the economic instability that’s turned the stock and currency markets into daily seesaws can mean the evaporation of thousands of dollars’ worth of college savings.

And after all, being a college student in a foreign country is always tricky.

But this year, college advisors are worried that credit panics in Europe and Asia — coupled with the decline of a number of currencies worldwide — could create a perfect storm, forcing many students who would have studied in the United States to stay home.

At Oregon State University, international students already are lining up for scholarships in preparation for tough times.

“Our scholarship requests more than doubled this year,” said Laurie Lewis, assistant director of international student and faculty services at Oregon State. “I think that is indicative of all that’s going on.”

Visas limit work options

Judy Van Dyck, director of international affairs at Portland State University, whose office provides aid and academic direction to the university’s 1,552 international students, said foreign students are especially vulnerable to economic turmoil.

Tuition for international students is higher than domestic students, financial aid is scarce, and their student visas prevent them from working off campus for more than 20 hours a week.

“We’re very concerned, and we’re trying to follow this closely,” said Gil Latz, vice provost for international affairs at Portland State.

“The irony is because the dollar is weak, there’s a great deal of interest across the world to pursue studying in the United States,” Latz said.

But with world financial markets gyrating daily, it’s likely that more and more students will find themselves in Wild’s shoes.

Megan Serenco, who advises the 155 international students at Pacific University, said that as finances tighten, universities could see students from Korea or other vulnerable countries packing up and heading home.

“I’m crossing my fingers,” she said. “We haven’t lost anybody yet and hopefully we’ll be able to maintain the growth that we’ve seen over the last few years.”

Currency fluctuations hit hard

With the bills racking up, a slight (or, in some cases, drastic) drop in the value of a student’s home currency can make a big difference.

Yu Nakao, an international student at Portland State, said the Japanese yen has held its value while the dollar has slumped, so she’s not feeling the pinch yet.

But with tumultuous markets, it’s hard to figure out when to transfer money into the United States.

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