More than 4.5 million students study outside their country of citizenship every year. China, India, South Korea and other Asian countries represent 53% of all foreign students enrolled in secondary education worldwide, according to the OECD, European countries represent 23%, African countries account for 12% and the rest of the world 12%. The Majority, 36% of international students, prefer to study in English speaking countries, while the USA is the leading destination for all international students. Germany, France, The Netherlands and the other non-native English speaking European countries account for just over 20%.
Studying abroad is not a cheap activity do say the least. In the USA alone, an international student will pay on average just over $30K a year, while in the top 30 universities in the US, this number can easily reach $70K a year, including room and board. In the UK, Canada and other top destinations, the average cost per year is quite similar to that in the USA. This means that the international students industry is easily a $100 Billion industry. So with an industry that size and with the high educational costs per student, what exactly is being done to ease the economic discomfort of students.
Secondary education is valued by many and is supported by different individuals, private organizations and governmental institutions, who all offer scholarships to students in order to ease their economic burden. Scholarships are often given to a verity of individuals from a verity of economic backgrounds, who previously exceled in their earlier education, sports or professional experience and who show great promise. Scholarships as a whole, are a good way for students to avoid paying the high costs of their pursuit for good higher education.
International bank transfers
Not all students manage to secure themselves scholarships and as a result require to use their own funds to pay for their tuition fees. As students live in different countries from where they will end up studying, they will need to transfer money internationally. These transfers are quite costly as they involve different currencies and the usage of the traditional banking system. Taking the example of a UK resident studying in the USA and transferring an amount of $30K, the student, or his parents, will pay between $300-$600 in unnecessary fees, depends if they transfer the sum as a whole once or in a few transfers.
Why is it so expensive? First, the banking system uses SWIFT, which is a network that connects all the banks in the world and allows them to communicate with each other. Using the network entails a cost and not a minor one. Depends on the amount of the transfer and the amount of banks that are involved in the transaction, a few banks could be involved as some banks have no business relations with each other and require an intermediary bank, you will pay between $10-$250 per transaction.
Second, the banking system again. Banks simply offer poor exchange rates for individuals, which is in complete contrast to the exchange rates large corporations receive. With regard to our example, the exchange rate of a British Pound (GBP) to a US Dollar (USD) could be up to 2% from the mid-rate, which is the exchange rate that is being traded in the market in any given time. This means that the bank earns 2% of the total amount of your transfer for a simple currency purchase.
What can be done you ask? Use companies that specialize in International bank transfers, but are not banks, Covercy is such an example. It is a company that can save you up to 80% of the bank fees, on both the SWIFT charges and the high exchange rate. By creating a network of local bank accounts in different countries, they are able to avoid the SWIFT charges. In addition, they offer exchange rates that vary between 0.5%-1% depends on the currencies you are interested in. It is clear that using such a service will help save some money, money that could be put to better use.