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AUC’s Fees in Egyptian Pounds: Decision by Egyptian Court

ASSIUT—Late last week, Egypt’s Administrative Court ordered the administration of the American University in Cairo to accept tuition payment in Egyptian currency rather than US dollars.

A lawsuit filed by 60 parents against Egypt’s prime minister, the spokesman for the parliament, the minister of higher education, and the president of AUC said that for 95 years the university accepted tuition payment in Egyptian pounds. Then, in 2014, the AUC decided students should pay 50 percent of tuition in Egyptian pounds and 50 percent in US dollars, at a rate fixed to the Central Bank’s exchange rate in 2014 (that is, 7.5 EGP to $1). But the Egyptian government’s decision to float the EGP at the end of November 2016 changed the exchange rate for $1 to at least 17 EGP, which raised the university’s fees by about 30 percent.

“The cost of tuition for each semester varies according to the number of credits, usually not less than 15,” said Tarek Abdulmuttalib Mohammed Mukhaimar, father of two female students at the university. “This is approximately 85,000 EGP to be paid in two parts; $5,000 and 40,000 EGP. Still, the devaluation of the Egyptian pound against the US dollar pushed the fees over 135,000 EGP, which is a very large sum of money.”

Brian McDougall, the university’s chief financial officer, explained in an interview with Al-Fanar Media in December that the university’s decision to collect half of the fees in US dollars was a result of a consultation among the university administration, the student union, and the Parent’s Association to share the risk of exchange rate changes. Back in 2015, the devaluation of the Egyptian pound by 25 piasters led to a $1 million financial loss, according to McDougall. But now that the Egyptian pound has fallen so far against the US dollar, the university would lose about $36 million if it continued to receive fees from its 5,000 students in Egyptian pounds.

There are 21 private universities approved by the ministry of higher education, most of which are affected by the currency floating decision, especially given that most of those universities determine their tuition in dollars, and according to the banks’ official price. But none of them witnessed a wave of protests like the ones at AUC. In addition, public and private universities also receive the tuition from international students in euros and pounds sterling.

According to Amr Khalid Al-Alfi, the head of the university’s student union, many meetings were held between students and the university administration to discuss the decision to split the cost into two currencies: “But there was no real response to students’ demands, although that decision forced many students to quit their studies at the university.”

In 2015, the university issued a report confirming an increase in the percentage of students applying for the financial aid program, which is provided by the university at a cost of $28 million a year, in the form of scholarships and reduced fees. The report noted that about 60 percent of the university’s students rely on this program to cover their study expenses, with 48 percent of those students joining out of financial necessity, and about 25 percent applying for “achievement scholarships,” taking advantage of their outstanding academic, athletic, or other achievements. According to the report, the university administration has now canceled the achievement scholarships to meet the growing need for the financial aid program.

“We respect the court’s judgment,” said Rehab Saad, director of media relations at the AUC. “The university is waiting to receive the court’s decision in writing so our legal affairs department can arrange for it to be implemented starting from the new academic year.”

It is not yet clear whether the administration of the university will increase fees in Egyptian pounds to compensate for the financial loss caused by the court’s decision.

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