Funding the Education Abroad Office: Budget Structures 101
Centralized or decentralized. Fee-based, tuition-based, or self-supporting. When it comes to funding an education abroad office, there are as many combinations as there are study abroad programs.
“There are very few commonalities,” says Beth Laux, EdD, executive director of international programs at Pepperdine University. The only common factors, she says, are “maybe in the amount of work there is in the budget process, the need to diversify funding sources, and the blend of institutional support and fees.”
“In a lot of cases, the person in my position is the [equivalent of the] CEO and the CFO,” says Heather Thompson, director of education abroad at the University of Texas-Austin (UT Austin). Many in her position, she says, operate “with no accounting support, or just the minimal accounting or marketing support.” Funding and financing education abroad are core competencies, according to the NAFSA International Education Professional Competencies, but the reality is that many education abroad professionals are still developing these skills.
With many education abroad offices experiencing pandemic-related decreases in student participation—and corresponding revenue drops—leaders and staff are dealing with uncertainty as they plan for the future, making it an opportune time for them to more deeply understand where funding for their office comes from. Each budget model—whether centralized, self-funded, or a hybrid of both—has upsides and downsides, and becoming familiar with the tradeoffs can help offices work amid constraints.
Budget Structures 101: Centralized, Self-Funded, and Hybrid
The most common approaches to budgets on campus are centralized and self-funded (decentralized), so the education abroad office’s budget model “depends on the university and the structures,” says Laura Ochs, MA, director of study abroad at Emory University’s College of Arts and Sciences. Depending on the institution’s structure, she says, “some directors of study abroad might have more influence and decisionmaking. Every situation is different.”
A centralized approach typically means that the education abroad office’s costs, both administrative and program-related, are funded from the institution’s general fund. The main benefit of this model is stability, since the education abroad office’s budget is not predicated on how many students go abroad each year; the office is essentially treated like an academic department.
“Some directors of study abroad might have more influence and decisionmaking. Every situation is different.” —Laura Ochs
There are drawbacks, though, despite the stability a centrally funded approach offers. The budget allocation can vary, depending on the overall financial health of the institution. This model does not easily allow for additional budget to cover increased demand for the office’s services; budget allocation is the same whether 100 or 300 students go abroad.
Emory has a centrally funded office. “Our college has a budget office, which gives us our budget and the amount we have been budgeted for each year,” Ochs says. The education abroad office itself brings in significant revenue, and any money it generates goes back to the institution, where the college’s budget office allocates where that money will go, Ochs explains.
A centralized approach often means a simpler process when it comes to budget requests and a closer relationship with campus leadership, students, and academic advisers, as well as an adherence to the institution’s strategic plan.
“The budgeting process for Pepperdine is centralized. Everyone goes through the same process, but there isn’t a leadership structure that funnels all of the budget requests,” says Laux. “I would say we have a centralized budgeting model and a [diffuse] leadership model.”
Pepperdine has six international sites that support the university’s undergraduate study abroad programs with 80 staff members worldwide. The university, which has approximately 3,500 undergraduate students, sends between 750 and 800 students abroad each year.
“There’s an understanding that what we do is broader than an academic unit,” says Laux. “There are considerations that include those factors when the university assembles the budget. Study abroad is valued at every level. It is a core part of the undergraduate experience.”
The decentralized, or self-funded, model dictates that the education abroad office covers its own costs, usually with student participation fees. This model provides control and flexibility and makes the office resilient to campuswide budget cuts. The drawback is that the office is vulnerable to outbound mobility trends, as the budget is wholly dependent on revenue from program participation, which can shift dramatically.
“There’s an understanding that what we do is broader than an academic unit. ... Study abroad is valued at every level. It is a core part of the undergraduate experience.” —Beth Laux
The self-funded model has been on the rise in recent years. Institutions including Arizona State University, Elon University, and St. Edwards University all have self-funded education abroad offices. “A number of study abroad offices got kicked off their central budget a number of years ago, and now they’re 100 percent self-supporting,” Thompson says. “What you have is what you bring in.”
Even among the centralized and self-funded budget approaches there are some quirks. A hybrid model is where an education abroad office receives part of its funding from the institution—often for administrative costs—and pays for program operations with a cost-recovery model.
“We’re a hybrid model, so there’s [one] study abroad office that serves all of campus,” says Thompson at UT Austin. “But then the law, business, and engineering colleges have embedded education abroad teams, and those teams are funded by their college. They’re not funded by the central budget that funds my office. We are all considered part of our larger context, which is Texas Global, but the funding model for each unit is slightly different.”
Since Thompson's office is funded through a hybrid model, there are elements to the budget process that are decentralized, which can lead to more creativity and empower the heads of certain units.
“We are all considered part of our larger context, which is Texas Global, but the funding model for each unit is slightly different.” —Heather Thompson
Thompson says the financial aid office prefers to streamline its processes by delegating to her team the responsibility for answering the financing questions from the three embedded education abroad programs at the school. The financial aid office does not “have the manpower to keep up with four different sets of rules—they only want to work with [my team]. So if anybody on campus needs something from financial aid in one of those other offices, in a decentralized model, they have to go through me to get to financial aid. For us, it works well. We’ve figured out a kind of pipeline.”
The Intricacies of Funding with Fees
One element that most institutions have in common, whether they are public or private, is that the revenue from tuition and fees affects the study abroad office operations budget—especially if the office is centrally funded.
“There’s money you get to fund programs and money you get to fund students, but very few [resources] that fund your office infrastructure, other than your campus’s policies for administration, whether it’s through a tuition allocation or a fee structure,” says Thompson.
One source of funds can generate quite a bit of revenue for an education abroad office: application fees. “So many study abroad offices use application fees as one of the most basic funding sources,” Thompson says. “You could probably say application fees are 20 percent or more of their operational budget.”
UT Austin, for example, charges $75 for a student to apply to an education abroad program, an amount that has not changed in several years and seems to be what the market will bear, Thompson says.
“I think anybody who’s working on budgeting feels constrained because there’s a certain level of market tolerance,” she says. “This is what we talk a lot about in budgeting and financial models. At what point do you hit your market tolerance?”
As a public university, UT Austin receives state funds and institutional support, as well as program fees from students ranging from $1,200 to $3,000 per semester. But for public institutions, increasing fees in a centralized or hybrid budget model is not easy. There are set timelines and an involved process for fee increases across the institution, often involving state officials.
“I think anybody who’s working on budgeting feels constrained because there’s a certain level of market tolerance. This is what we talk a lot about in budgeting and financial models. At what point do you hit your market tolerance?” —Heather Thompson
Centrally funded public institutions have the reliability that comes with that budget model, but change is often slow. “You’re at the mercy of the established infrastructure of your university,” says Thompson, and often the state board of regents and even lawmakers.
Pepperdine’s education abroad office does not have an application fee for its programs; instead, the office relies on tuition and program fees. Tuition for education abroad programs is the same as a semester at the home campus, plus an additional international program fee of about $3,500 and various program-specific fees.
However, the Pepperdine education abroad office is responsible for acquiring funding to maintain its international sites’ infrastructure, including contributing into foreign universal health care systems for staff. “I have to make hard decisions on what to prioritize or not,” Laux says. “It’s almost like we’re budgeting for a mini university versus a program.”
Regardless of the budget model and financing method an institution has in place, education abroad offices must have thoughtful leadership and a mission that aligns with institutional priorities.
“It is a boatload of work to pull together a budget,” Laux says. “It doesn’t matter what the model is; it is one of the hardest things we do. It’s high stakes.” •
- “Funding Models for Education Abroad Operations”
- “Administration of Education Abroad Programs” chapter in Senior International Officers: Roles and Responsibilities
- “Financial Stewardship” and “Funding and Financing Education Abroad” sections of the NAFSA International Education Professional Competencies
- Understanding Partnerships and Budgeting with Program Providers in Education Abroad e-Learning seminar
- Stay tuned for the Handbook on Financial Aid for Education Abroad, a digital download coming this month that explains how to use federal financial aid to fund education abroad experiences.
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