Venezuela's Currency Crisis Is Forcing Students Abroad Into Desperate Situations

Federico Albaharran Hidalgo was nearly finished a four-year bachelor's degree in Ottawa when, suddenly, he confronted the possibility of having to stop. He could no longer afford to pay for school even though, technically, he had the money.

Hundreds of miles away from home in the Canadian capital, the Venezuelan man found himself the victim of a bureaucratic nightmare — and hardly alone.

Students from the South American nation who are studying abroad have been feeling the brunt a severe currency crisis back home, which has made exchanging the bolivar into foreign currency a complicated, seemingly impossible task.

Due to rejected currency exchange applications and delays in processing, many of the people — 25,000, according to Venezuelan Students Abroad — currently studying outside of Venezuela in more than 20 countries have been left to fend for themselves, sometimes forced to abandon their studies, buy money on the black market, work illegally, or even into homeless shelters.

"You cannot believe the kinds of things Venezuelans have to do to survive in different countries," said Carlos Moreno, president of advocacy group Venezuelan Students Abroad, from Salt Lake City. "I have seen students asking for food at the cafeteria and sleeping in 24-hour restaurants."

Venezuelans hoping to use their own money beyond the country's borders — whether it's for school, work, or travel — have to apply for special permission to do so.

Currency controls were introduced in 2003 by former President Hugo Chavez to curb capital flight. The country now has three official exchange rates — four if you count the black market rate. Students are at the mercy of CENCOEX, the Venezuelan agency in charge of exchange controls, and have to go through an exhaustive documentation process to prove they'll actually be attending school, which still doesn't guarantee they'll get the currency when they need it.

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As of 2012, only those studying subjects prioritized by the Venezuelan government, like engineering and agricultural science, could exchange their money at the preferred rate. Students like Hidalgo, who were majoring in political science, were out of luck.

The issue gained such prominence in Venezuela that, in April, the country's public defender Tarek William Saab sought to set the record straight on "contradictions" surrounding the plight of students abroad, noting his office had received 250 complaints that required his attention.

According to Saab, there are 18,000 Venezuelans taking courses in other other countries, the vast majority of whom are trying to learn another language, not complete professional degrees.

All told, he said that 83 percent of students abroad are taking language lessons, about half of whom were studying English. He also said between 2013 and 2014, 60 percent of people who left the country as students hadn't returned.

"If you ask me what should be the priority, taking into account that this is Venezuelan currency that is being sent to help build professionals who later should return to our nation with their skills, evidently, specialized courses should be the priority," he said. "In postgraduate studies, which is what we'd care to have most as a Republic, it's only about 20 percent" of students abroad.

Hidalgo was shut out of the application process to exchange his currency from the start. To pay his tuition fees, his parents bought dollars on the black market, as many families of students abroad reluctantly do.

On the black market this month, a dollar is worth about 800 bolivares, dramatically more than the legal exchange rates of 6.3, 12, and 199 bolivars used for priority imports.

"We're talking about a big amount of money that is required for my parents to pay every semester, and that's the case for many students here," says Hidalgo, who is working at the Canada Venezuela Democracy forum as he waits to apply for permanent residency and resume his studies.

He said Venezuela revises its rules around how students can access currency several times a year, making budgeting even more challenging.

"[Students] came here with a plan, and after the government started regulating and changing the process to get those dollars, they weren't able to pay anymore."

Hidalgo's parents are lawyers who sometimes work outside of Venezuela, which enabled them to pay part of his tuition in dollars and purchase money on the black market at such an exorbitant rate. But by the end of his third year, it simply became too expensive. Instead of dropping out, Hidalgo decided to graduate from a three-year program. He considers himself lucky.

"Despite my great fortune, the ongoing growth of the exchange rate in the black market made it too difficult for my parents to keep supporting me, and that's why I chose to change my four-year major to a three-year one," he says. "So that they wouldn't have to pay for me anymore."

Even if they're not outright rejected, processing delays in the multi-step process leave many students without money, often for months.

A quick Twitter search for #EstudiantesOlvidados, which translates to "forgotten students," shows hundreds of posts from students who have been waiting on foreign currency or even a response from CENCOEX. One student said she'd been waiting for funds for 10 months. Another hadn't heard from CENCOEX in six.

Kevin Prato had secured the funds and documents, and was excited to start a 3D design program in Vancouver. Exchanging money was the last thing he expected to have issues with.

Prato, whose family couldn't afford to buy dollars on the black market, had to go through the official channels. The headache — and absurdity of the situation — started before he even left Venezuela. To exchange money, the government required proof that he'd reserved a spot at a school. But Prato says the school wouldn't provide the confirmation until he paid a deposit, which he couldn't pay until he exchanged his money.

"It was a cycle with no escape," he says.

Prato also had to go in person to Vancouver to pay the deposit with a credit card because online purchases in Venezuela are limited to just $300 a year. To get around the restriction, Prato applied for a "travel credit" which would grant him permission to use $2,500, on a trip on the condition that he stay for at least week. Unable to afford a hotel for seven nights, he found a couch to crash on, paid the deposit, and returned to Venezuela.

It was the first of an endless series of bureaucratic hoops Prato would have to jump through to live in Canada, with regular, unexplained delays and what he sees as a lack of help from the Venezuelan embassy leaving him in a state of constant uncertainty. The Venezuelan embassy in Toronto ignored repeated requests for comment for this story.

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The last straw, Prato says, came towards the end of his first year in Canada. Money to cover his living expenses was supposed to be sent to him in three chunks. The third instalment arrived two months late, and Prato received only a third of it since he was only supposed to stay in Canada a month longer.

"They don't give you the money in cash," says Prato. "You have to go to a foreign country without money, open a bank account, and then they'll send you the money, and it's always delayed."

"Luckily, I have friends here, but if I didn't, how am I supposed to move into a place and say I'll pay rent in two months?" says Prato. "For [the government] the trouble doesn't exist. If trouble exists it's because you don't like the government, you're pretentious, and you want more than the government says you need."

Moreno, who founded Venezuelan Students Abroad two years ago in response to the crisis, has become a voice for many of these students. Their efforts to help have included looking for scholarship opportunities, organizing food drives, raising awareness, and working with organizations and communities to help those who can't afford to stay abroad nor go back to Venezuela.

For its part, the Canadian government says most study permit holders can work on and off-campus without requiring a separate permit.

Mi solidaridad con miles de estudiantes en el exterior embaucados por la irresponsabilidad infinita de este gobierno! — RAMÓN MUCHACHO (@ramonmuchacho)October 3, 2015

There are limitations to this, however. International students can only work up to 20 hours a week off-campus, and on-campus jobs will have their own set of restrictions. In both cases, enrollment as a full-time student is a must.

"In situations where international students are, through no fault of their own, unable to meet the costs of studying in Canada, academic institutions often grant some leeway on obligations such as tuition and residence fees," Nancy Chan of Citizenship and Immigration Canada said in an email.

If students are caught working illegally, however, the Canadian Border Services Agency will "investigate and take the appropriate action mandated by law, including removing the individual from Canada."

Follow Tamara Khandaker on Twitter: @anima_tk