What could Brexit mean for students studying abroad?

The referendum on Britain’s EU membership is fast approaching — and no matter which side of the debate you’re on, it’s important to be aware of how changes could affect you as a student.

More and more students are studying abroad, with UK numbers rising and Erasmus reporting increases in students joining the programme every year. Studying abroad can be an incredible opportunity, but with potential changes in how EU regulations affect the UK, it’s important to be clued up about the consquences of a potential Brexit.

Alex Edwards, currency expert at UKForex, a foreign exchange provider, answers a few key questions ahead of the referendum.

1. How might tuition fees change if we leave the EU?

Brexit might mean that students from the UK no longer get the same access to universities or higher education as nationals of EU countries. In the most extreme case, it may also mean fewer EU students are able to attend UK universities, especially if legislation on free movement within the EU changes.

To cover this, British universities may feel it necessary to bump tuition fees, something that’s already hitting headlines. EU students might no longer receive UK government loans, lessening demand, while UK universities could be allowed to charge EU students whatever they want, again potentially putting more off, forcing the government’s hand and upping the amount that UK universities need to charge to UK students.

The UK would probably also lose access to research funding from the EU, which could affect you if you’re doing research in a UK institute.

2. What else should students studying in the EU consider?

Other than expecting to pay different (most likely higher) tuition fees than EU students, there could be a lot of other consequences that come with an exit. Depending on withdrawal negotiations and what happens immediately following any potential Brexit, access to healthcare, access to banking and associated costs, and insurance, amongst other things, may all be impacted.

These kinds of things are important day to day, and if you’re studying in the EU you need to read up on any changes, should Brexit happen. The last thing you want is to show up in a European A&E with a European Health Insurance Card (EHIC) that doesn’t work.

3. What can I expect in terms of currency fluctuations?

You can definitely expect the exchange rate to fluctuate. The uncertainty over the vote has already weakened the pound, which has, in recent times, fallen significantly against the euro and dollar — those studying in the US have already been affected as a result. Polls, rhetoric and news headlines on the subject are causing a lot of this currency uncertainty — every time Boris Johnson and David Cameron open their mouths, the exchange rates shift.

If news reports suggest that the UK will remain in the EU in the run up to the vote, then this should be good for the pound. If not, then we’ll see the pound fall. If it’s 50:50, then June 23rd will be an extremely volatile day in the foreign exchange market. The pound could equally appreciate or depreciate very quickly on the day.

4. What does this mean for UK students abroad?

With the pound being as volatile as it is, it may be difficult to get a grip on how to fund your time as a student outside of the UK. Month to month the pound can be a lot higher or a lot lower. As a result, some months may be more expensive and others less so for you, as a student studying abroad — a lower exchange rate can make a real difference to your budget. Uncertainty around the outcome of the referendum is hurting the pound, so right now it’s a lot more expensive to be funding student life with pounds, especially compared to this time last year when the GBP/EUR rate was closer to 1.40.

5. How can I protect my money if I know I’ll be studying or living in Europe?

It’s best to seek expert advice, especially if you’ll be transferring large sums of money — for example, tuition fees or a deposit for a flat. Transferring when the pound is weak could cost you a significant chunk of cash, so it’s good to plan ahead. One way to do this is to wait until the exchange rate is better for you — of course, the possibility of Brexit on the horizon makes this difficult.

One option is a forward contract, a currency tool that lets you lock in the current exchange rate for a transfer you want to make in the future. It means that if you think today’s exchange rate is good, or that it might get worse before you make a payment, you can protect your money from any dips in the market before you complete the transfer.

Originally published at https://www.thenationalstudent.com.