BEIRUT — Since Banque du Liban increased the rate of the so-called “Lebanese dollar” or “lollar” used for bank withdrawals from LL3,900 to LL8,000 last month, students in Lebanese universities have been waiting for the other shoe to drop.
A number of Lebanon’s universities had already been pricing their tuition fees for local students at the lollar rate, and thus a new increase seemed inevitable. Yet so far the top universities have not increased the exchange rate used for tuition payments.
Students, however, remain fearful that a tuition hike is on its way.
“It was already a struggle when the tuition fees were priced at the rate of LL1,515, then it became a bigger challenge when the university asked us to pay at the rate of LL3,900. If the university now decides to change the tuition fees to the rate of LL8,000, graduating will be impossible for me,” Lea Haddad, a psychology student at the American University of Beirut, told L’Orient Today.
Haddad, who has only one year left to graduate, is currently paying her tuition fees at a base rate of $24,000 per year. While Lebanese students can pay their tuition in lira, her fees in local currency more than doubled in early 2021 from LL36 million to LL93,600 million. In December 2020, AUB asked its students to pay their tuition fees at a rate of LL3,900 to the dollar, rather than LL1,515.
If the university adopts the new lollar rate, she would have to pay LL192 million. While the dollar price would not change, Haddad’s father gets his salary in lira since he lost his former job abroad, which had paid in dollars, in late 2019.
Like Lea, many university students started 2022 already under financial stress after spending the past academic year grappling with increased tuition fees coupled with skyrocketing prices of basic necessities including food, fuel and medicine.
Since April 21, 2020, the lollar had been pegged at LL3,900 to the dollar. In December 2021 Banque du Liban issued a new circular establishing an increased rate of LL8,000. The new rate is effective until the end of June 2022, although previous experience indicates that it may be canceled before then or extended beyond that date.
The new lollar rate is still much lower than the parallel market rate, where the lira hit a new record low of LL29,100 to the US dollar as of Monday and appears to be on pace to hit LL30,000.
The circular begged the question: Will academic institutions adopt the new rate in their tuition fees?
Speaking to L’Orient Today, Education Minister Abbas Halabi said, “Law 515, which is the law in force to date on the issue of school budgets, does not allow any increase in premiums as long as there are no new burdens imposed by new regulations and laws.”
Halabi then explained that in his view BDL’s circular does not constitute a regulation that would allow such an increase.
Halabi said that he had urged all universities and schools in Lebanon to stick to the current financial scheme so that “students and the education sector overcome this hard stage.”
“Once universities start to adopt the new lollar rate, they will need to take into consideration that not everyone has a Lebanese dollar account,” Mohammad Ibrahim Fheili, an economist and risk strategist told L’Orient Today, explaining that many people are now paid in Lebanese lira and thus will face serious financial challenges if they have to pay at a rate of LL8,000.
“Another burden is … the ceiling put on cash transactions in local banks,” Fheili said. “Lebanon is currently dealing primarily, but not exclusively, in cash, and parents are going to find it hard to withdraw the full amounts of tuition fees given the cap dictated in the circular.”
As of the beginning of January, the American University of Beirut and the Lebanese American University had not applied a tuition hike based on the new lollar rate. Saint Joseph University (USJ) divides its tuition fees into two amounts, with 50 percent priced in Lebanese pounds and the other 50 percent in lollars, which so far is still set at the rate of LL3,900.
AUB sent out an email to its students late in December 2021, informing them that “students may settle their spring tuition payments by bank transfer or bank deposit starting on January 3 at the rate of LL3,900.”
The university did not rule out adopting the new lollar rate in the future, however, adding that “the administration is currently reviewing the tuition collection scheme for the spring semester and will announce any potential changes in the coming weeks.”
The Lebanese American University adopted the same strategy in early 2020, setting its tuition rate at LL3,900 to the dollar. Like AUB, LAU has not yet made a decision regarding applying the LL8,000 rate, university officials said.
Haddad said she is still anxious that the university will soon make the decision to adopt the new lollar rate.
“This message made me feel more stressed, because it means my financial stress can now worsen overnight, as such a decision would now throw my life into disarray. I may never finish my degree,” she said.
BEIRUT — Since Banque du Liban increased the rate of the so-called “Lebanese dollar” or “lollar” used for bank withdrawals from LL3,900 to LL8,000 last month, students in Lebanese universities have been waiting for the other shoe to drop. A number of Lebanon’s universities had already been pricing their tuition fees for local students at the lollar rate, and thus a new increase...