Strong greenback strains finances of Vietnamese students in US

The appreciation of the dollar means a decrease in the amount of money Pham Huu Nghia's parents send him each month to pay for his education at Northern Virginia Community College in Virginia.

His monthly allowance has dropped from US$2,000 to around $1,500.

"My parents say the dollar rate increase is putting financial pressure on them," the 22-year-old says.

In fact, he says, whenever he talks to them on the phone they complain about the exchange rate, and tell him to go easy on spending.

"At the moment I only spend money on the most necessary things."

Nghia and thousands of other Vietnamese students in the U.S. are feeling the pinch the stronger dollar is causing, and the cost of studying abroad has increased dramatically from what it was two or three years ago.

This week on Saturday the dong fell to an all-time low of VND24,870 to the dollar at state-owned Vietcombank. The Vietnamese currency has fallen 7.25% since the beginning of the year.

However, analysts expect more pressure from a surging dollar in the remaining months of this year since the State Bank of Vietnam does not have a lot of reserves left to defend the dong after selling around 20% on it so far this year.

Bloomberg said the Vietnamese currency is set for its longest stretch of losses since June 2008.

Nghia has been trying to ease the strain on his wallet by dividing the cost of subscription services like Netflix and Amazon Prime with his three roommates and sharing rides with them.

"To cut back on transportation costs, the four of us carpool to school," he says, noting that gas prices in his neighborhood have jumped from around $2 in February to over $3.5 now.

"The person who goes grocery shopping will help pick up food for the others as well."

He has also cut back on eating out and started cooking at home, and only eats beef once a week, relying more on chicken and eggs instead.

Thien Tran poses for a photo at Virginia Tech in Virignia, the U.S., in March 2021. Photo courtesy of Tran

Thien Tran, a Ph.D. student at Virginia Tech who has a full scholarship with monthly stipend, also finds himself under budget pressure.

He has given up his original plan of buying a car due to the rising cost of fuel and relocated to a place closer to school after his rent was hiked by 50%.

The soaring dollar has also caused emotional stress for Vietnamese international students.

Nguyen Nhat Anh, who is studying in California, was planning to go back to Vietnam during the upcoming winter break to see her family and friends after a two-year gap due to the Covid pandemic.

But she has had to call off the trip and intends to use that money now to cover living expenses.

"Now I just want to finish my studies as soon as possible and return home," she says.

Some students now work to make ends meet.

Nghia has been doing accounting remotely for a company in Vietnam. He has also been working at a nail salon though overseas students are not permitted to work off-campus.

He says he is doing it to ease his parents' financial burden and live a bit more comfortably.

Meanwhile, in Vietnam, many are unfazed by the recent decline in the value of the dong against the dollar, but have no intention of calling off plans to study in America.

Bich Tram, a 12th grader at Ton That Tung High School in Da Nang City, plans to study in the U.S. next year and is still researching schools for graphic design and public relations curriculums.

She has dreamed about studying abroad since she was in 11th grade, and spent a lot of time convincing her parents to let her pursue higher education outside Vietnam.

They told her she could apply to whichever school she liked, but the tuition has to be less than $50,000 a year. However, following the exchange rate shock, she hopes to find a schools that gives her a 30 percent scholarship.

"If I don't get scholarships from schools that accept me, I will go to one where the annual tuition is $30,000 or less."

She wants "an immersive experience in another culture," and so does not like the idea of studying at a local school offering affiliated foreign programs where students can still get a foreign degree.

In fact, all indications are that demand to study abroad is surging among pandemic-weary students.

The U.S. has always been one of the top overseas study destinations for Vietnamese students.

Phung Xuan Nhat, a former education minister, said in 2018 that Vietnamese parents invest $3-4 billion every year on their children’s international education.

The country had 21,631 students enrolling in American colleges and universities in the 2020-21 academic year to rank sixth globally, according to the Institute of International Education.

Vietnamese students at a U.S. Higher Education Fair in Hanoi on October 4, 2022. Photo by VnExpress/BM

The rising value of the dollar is good news for some Vietnamese students since it means their remittances fetch more in dong back home.

Thien Tran is relieved that his family is benefiting from his remittances, describing it as the "only bright spot" in the dollar’s rise.

Anh is "disappointed" to see the stronger dollar leave her "with less freedom to do the things I would like to do."

She hopes the exchange rate will drop so that she can book a flight to Vietnam and see her family this winter or sometime next year.

"My mental health has been on a downward spiral lately as I keep thinking about how to cope with the rising prices.

"Now all I can do is do my best at school to make my family proud."