Remittances for Education Abroad Reach All-Time High

The amount of remittances for education abroad has surged as the value of the won against foreign currencies has steeply increased.

Increases in foreign remittances can be interpreted as numbers of parents sending their children’s education fees and allowances together to take advantage of the situation, and that the number of students who are in foreign countries to attend universities or to learn languages has increased.

According to a report released by the Bank of Korea on March 2, the amount of net outgoing money for overseas education between January 2005 and October 2004, when the won-dollar exchange rate fluctuated around the 1.150 mark started to drop in earnest, was 873.2 million dollars, up by 37.5 percent from the same period a year ago.

In particular, 212.6 million dollars were sent abroad for educational purposes in November 2004 when the won-dollar rate suddenly tumbled, for a year-on-year 82.8 percent increase.

In January 2005, the net outflow of money for foreign education reached 292.9 million dollars, and all-time high for January.

The financial burden of parents who send their children to Canada, Australia and New Zealand has decreased as the value of won against currencies in those regions has sharply increased.

The won-Canadian dollar exchange rate was recently recorded at 814.1 won, a 10 percent drop from 904.1 won in the end of September last year. The exchange rate against Australian and New Zealand dollars dropped 3.6 percent and 5.2 percent respectively during the same period.

A general manager of a commercial bank known as “Lee” (46) sent five million won to his wife and son, who went to Canada two years ago. The amount of Canadian dollars they get for the won he sent surged to more than 6,000 dollars from 5,400 dollars last fall last year. He is planning to send one-year’s worth of money to his family living in Canada when the won-Canadian dollar exchange rate drops more.

Han Hyun-woo, the private banking team leader of foreign emigration sector at Korea Exchange Bank said, “Many clients have increased the amount of their foreign remittances as the won-dollar exchange rate has dropped.”

Kyung-Joon Chung Kwang-Hyun Kim news91@donga.com kkh@donga.com