The Financial Future of AUBG

Starting in Fall ‘23, AUBG switched its payment currency from the dollar to the euro. Bulgaria aims to adopt the euro as a primary currency with a target date of January 1, 2025. However, the process is complex and continuous, and nothing is confirmed at this point.

 

This decision combined with the increase of 10.1% (approx. €700) in average net tuition, as per a document provided by the AUBG administration, resulted in an inconvenience for many students before the beginning of the academic year.

 

“I was personally affected by the change because I was on Work & Travel this summer with the intention to use my earnings to pay the tuition. Since my paychecks were in dollars, I needed to calculate the currency exchange and pay for it as well,” said Aleksandra Angelova, a sophomore at AUBG. She also expressed her dissatisfaction with the way the change was used as an excuse for slightly raising the tuition.

 

Dilyana Mileva, VP of Finance and Administration at AUBG, gave a detailed explanation of the reasons behind this decision.

 

 

“Although the university was foreseeing that Bulgaria would join the eurozone sooner or later, the reasons [for the currency transition] were not related primarily to that,” Mileva said.

 

According to her, the key driving force behind the currency change was the dollar volatility, which caused a problem with the university's profit and loss account. She mentioned that when she first joined the university in 2021, 90% of the university revenue was generated in U.S. dollars coming from tuition fees, donations, and endowment drawdown, while more than 80% of university expenses were incurred in local currency.

 

“The university was suffering from this volatility by registering a lot of fluctuations in the exchange rate between the U.S. dollar, the euro, and the local currency without being able actually to address them,” stated Mileva. She added that around 90% of the American universities outside the U.S. have taken similar measures to avoid a mismatch between income and expenses and to make the transactions easier for European students as they are the majority at  AUBG. 

 

Payments in euro advantage Bulgarian students because of the currency board that fixes the exchange rate between the lev and euro at exactly 1:1.96. Unlike the dollar, this means that when the university announces the tuition amount for next year, students will know exactly how much leva they will have to pay.

 

Mileva also commented on the increase in tuition fees that happened simultaneously with the change in payment currency. She listed the growing inflation in Bulgaria in the past three years (approx. 32,2% for the period Jan. 2021 – Jan. 2024, according to the Bulgarian National Statistical Institute) as a primary reason for the rising university cost.

 

“The university is a non-profit organization, which means that whatever we generate, we should invest it in the university activity. There are no owners, there are no dividends distributed there. So, when we do that balance, we still need to be on the safe side and have some surplus,” said Mileva.

 

On Feb. 14, 2024, the president of AUBG Dr. Margee Ensign gave an update on the university’s financial strategy during the Town Hall meeting. The estimated increase in the gross tuition fee for the Academic Year 2024/2025 will be 1,6% which is below the projected inflation for 2024 (4%) and 2025 (3%).

 

The only AUBG students affected by this increase will be the ones living in Skapto I and II as they can expect a 6% increase in their housing fees for the next year due to the increasing prices of maintenance and utilities. No changes are expected in student activity fees and meal plan deposits. 

 

“We try to keep that balance strict so according to the financial sustainability policy that universities have, students should not experience significant increases,” said Mileva. She also stated that although 51% of AUBG’s budget comes from tuition fees, the university is trying its best to keep the changes as minor as possible.

 

Editors: David Mitov and Radina Shtereva