Shake Your Money Maker: How Universities Can Profit By Letting Students Take Scholarships Abroad

"It's too expensive." That's one of the most common reasons given by students who choose NOT to study abroad. Obviously, there are some ways to make the experience affordable (if not comparable to staying on campus), but this post is dedicated to the indirect benefit to universities if they make study abroad more affordable. (Don't worry, I'll dedicate another post focusing on how provider study abroad companies can help in this effort too.)

I've talked to a lot of university study abroad and financial aid staffers over the past several months (heck, over the past seven years) about university financial aid policies for study abroad. A common dilemma most of us working in study abroad often face is:

Do we let institutional aid (scholarships, grants, etc.) leave the confines of our institutional "pots of gold" and let it go out into the world to (help) pay for study abroad (to providers, to overseas universities, or for plane tickets, rail passes, visas, health insurance, etc etc etc.)? 

For some universities, the answer seems to be "Yes! Let the money flow like water (as long as students go on XX programs) and we'll take the financial hit because we understand the soft, mushy, altruistic value of study abroad...yada yada yada." But a fair amount of universities tend to narrowly limit the number and/or type of programs where institutional funding can be applied to the cost of the experience. 

Obviously this will vary by institutional type. My experience says that private institutions can charge students home tuition, room, and board for third-party or exchange programs and make a small profit for administrative costs. This is rarely the case at most state universities where they would have to watch institutional aid sail off into the sunset with their students resulting in a net decrease in funds circulating at the university.

However, I think there's another way to look at this topic. I contend that allowing institutional aid to leave campus with students [i.e. the university would be investing in the experience], universities would experience an overall indirect net increase in institutional funding. Crazy, I know. Keep reading. 

My hypothesis: If a university has excellent study abroad programs, it will result in: 

  • More prospective students choosing to attend that university (for the chance to study abroad)
  • More students liking (and staying at) that university (as a result of studying abroad)
  • More students giving back as alumni (because they enjoyed their study abroad experience) 

More Overall Tuition on Campus

Let me elaborate. According to the 2009 National Survey of Student Engagement  (yes, I looked it up), 46% of first year students plan to study abroad (another 28% are undecided). [Even better, the American Council on Education's report in 2008 found that 55% of college-bound students were certain or fairly certain that they would study abroad during college.] That's a big chunk of students who see studying abroad as a natural component of their college experience. If a university could get a student to attend based on the opportunity to study abroad, that would mean more tuition dollars over eight semesters (even if the student takes money away from campus for one semester). 

More affordable study abroad = more students enrolling in the university = more tuition dollars overall. 

The upside for university CFOs [Chief Financial Officers - those guys who get nervous when they see scholarship money rolling off campus] is that only 2-3% of students nationwide actually end up studying abroad. Even if that number increased to 10%, I bet most universities would still stay in the black.

Study Abroad Keeps Students On-campus (sounds counterintuitive, but it's true!)

But there's more! Students who study abroad are more likely to be more academically engaged and successful - resulting in higher graduation/persistence rates - than students who don't study abroad. That means while students may take some of their on-campus money with them for a term or two, they're more likely to come back and keep paying tuition than their peers who DON'T study abroad. Wow! Major win/win factor! 

Study Abroad Students Are Successful (Read: Happier)

And it gets better. According to the SAGE project researchers (which includes my secret research crush, Michael Paige [and others] at the University of Minnesota), 98% of study abroad alumni said that studying abroad had a strong or some impact on their lives. If more universities can help make those impactful study abroad experiences affordable for students (by allowing aid to leave campus), they'll have a lot more happy alumni. And happy alumni are more likely to give back (can you say "alumni donations"?!) to the university that helped make their study abroad dreams come true. 

Okay,  I'll admit that my theory isn't foolproof. I'm just waiting for some awesome researcher out there to prove me wrong. [Paging Dr. Paige.]

What are your thoughts on this? Would it revolutionize study abroad at your institution if students were allowed to use their institutional scholarships? Would you use a survey tool that was able to tell you how many prospective students chose (or didn't choose) your institution because of study abroad (and other institutional factors)? Would that make the administration listen to your pleas for more funding if you could show them the money, so to speak? 

One BIG assumption I make with this post is that there isn't any research out there that tackles these question about institutional choice as it correlates with student desire to study abroad. Is there research out there that answers these questions?:

  • Do study abroad opportunities play a significant role in recruitment of students and impact their college choice?
  • Do students who study abroad have a lower or higher attrition rate than those who do not study abroad? (This report by the Georgia State System takes a crack at answering this question.)
  • Are alumni who studied abroad more/less likely to donate financially to the institution?

I think study abroad can be the differentiating factor for universities - especially universities who are experiencing considerable enrollment shortfalls. The best strategic collaboration a study abroad administrator can make on campus this fall is with the Director of Admissions. Your office has (i.e. study abroad) what his or her audience (i.e. prospective students) want.

But enough of my theories and questions. What do you think? Is study abroad a potential revenue generator for your university? Should it be? What would you need to make your office a big selling point for prospective students? How do we convince the powers that be that study abroad is something worth investing in?

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