Dropping Dollar: Americans in England Feel the Pinch

LONDON, Nov. 5, 2007 — -- For American student Paige Birdell, dinner in London usually consists of cheap, frozen minipizzas from the supermarket. Lunch is almost always a bagel and cream cheese. Her cuisine choice is driven, not by a love of junk food, but a lack of finances.

Like so many American exchange students in England, Birdell is feeling the pinch of the falling U.S. dollar. And it hurts.

"I look at my bank account and I'm just like aaaagggghhhh, please stop," she told ABC News.

Initially, Birdell set aside $3,000 from her savings to sustain her 14-week trip to London. Now, just seven weeks into her stay, she is already over budget. Birdell's exchange program gives her a £3 ($6) allowance for every meal and pays for her accommodation and courses. But it's not enough. She spent last summer working four jobs in order to save some money, and now nearly all of her savings are gone.

The biggest struggles are transport (her weekly subway costs top £23 or $46) and fun. Birdell's decision to study in England was motivated by her love of horseback riding. Now that she's here, however, it's impossible for her to do any.

"I just can't rationalize spending $80 on myself for one afternoon," she said.

Going out for a beer in London costs at least £3 ($6), the movies cost £8 ($16) and even DVD rental is £3 ($6). Trips around Europe and excursions to the countryside or to the theater will set you back considerably. As a result, Birdell said she feels very homesick in London and that the financial struggles have significantly dampened her experience.

She's Not Alone

There are more than 14,000 American students on exchange programs in the U.K., and Birdell's feelings of frustration are shared by many.

Spencer Coles, the director of marketing and student recruitment at Regent's College in London, said that many of the universities are also suffering. Regent's College charges tuition in U.S. dollars, and the school has not adjusted the fees to compensate for the falling dollar. If things continue like this he said that the school will be forced to hike up its fees, which could prompt a downturn in American students.

In a worst case scenario, exchange programs could become a luxury only for the more wealthy.

It's not only students who are feeling the impact of the falling dollar. Many American professionals working in London are also having a tough time, particularly those who are not paid in British sterling.

Fortunately for those with jobs in finance or law, most American companies offer a cost of living adjustment, known as a COLA, to reflect the relative weakness of the dollar to the pound. Tia Gubler, an associate with the law firm Sullivan & Cromwell, said that her friends who do not have good COLAs definitely feel the pinch: They live further outside of London, they have roommates and they worry about money more.

So what's an American in Britain to do? There seems to be a range of advice.

Gubler said she tries to do most of her shopping in the United States. Michael Hunter, a reporter for the Financial Times, told ABC News that Americans should think about living on the outskirts of London and that they should push hard to get paid in pounds. The U.K. international student Web site has a list of suggestions for exchange students, including keeping the heating down and cutting your own hair.

Birdell has not cut her own hair yet, but she has certainly tailored her diet to cut her costs. Until she gets back to the United States in seven weeks, she said she will continue "just trying to get by."