Massachusetts Institute of Technology was embroiled in last week as a prospective student, Venezuelan Amanda Vanegas, was denied appropriate financial aid due to her country’s exchange rate system, to MIT alumnus Jesús Bolivar. Venezuelan students at the University expressed concern about the issues faced by MIT’s prospective student.
“It’s a really complex case,” said Samuel Vilchez Santiago ’19, who is originally from Maracaibo — the same city that Vanegas lives in — but now lives in Orlando, Fla. “The reality is, no one uses the official rate.”
Since MIT’s financial aid office uses the Venezuelan government’s official bolívar to dollar rate in its calculations (VEF 10 per dollar) instead of the market rate, which is 23,000 times higher, Vanegas’s family were millionaires on paper, and hence she was not awarded any financial aid. Most ordinary Venezuelans, however, aren’t able to use the official exchange rate, and must rely on black market transactions to purchase dollars, which are hard to come by in an economy devastated by . Vanegas is in the midst of an appeals process; according to Bolivar, MIT announced that it is reconsidering its decision.
According to the government’s fixed official rate, one dollar is equal to ten bolívars, but with hyperinflation in the country, the actual rate most people use is closer to one dollar for more than 200,000 bolívars, and it tends to “vary day by day,” according to Santiago.
The country’s previous president, Hugo Chávez, established the official rate through the national bank in 2003, meaning the Venezuelan market was regulated completely by the government. In 2007, however, the government to cut three zeroes from the exchange rate, meaning that a dollar went from officially being worth around 2300 VEF to 2.3 VEF.
Despite the current economic crisis, the government has to maintain currency controls in the belief that it will help combat inflation, which has led to multiple official and unofficial exchange rates in the country.
According to Elkhyn Rivas Rodriguez ’19, another Venezuelan-American student, this has adversely affected Venezuelans, especially those who have dollar-denominated loans. When a significant number of families had the means to travel abroad, he explained, they were able to purchase dollars at the government’s rate, albeit with a cap of a $1,000. With the recent economic crisis, however, most people aren’t able to travel, therefore most Venezuelans only deal with the unofficial black market rate.
Daniel Bracho ’21, originally from Caracas, Venezuela, explained the effects of currency fluctuations on the average Venezuelan.
“Years ago, a bag of Doritos was two bolívars, so about half a dollar. Now, it’s hundreds of thousands of bolívars,” said Bracho. “Inflation keeps going up, but wages don’t, so everything’s now on the black market.”
Bracho hasn’t been personally impacted by financial miscalculations related to the multiple rates in the country, but he stressed that life in Venezuela is complicated because of the situation.
“I think from MIT’s point of view, they’re probably ignorant on the topic because not many Venezuelan students make it to MIT,” he added.
“Once they’re made aware of the issue, there’s a greater issue there that MIT faces,” added Rodriguez. “Sure, they’d like to help the student, but helping the student would require them to deal with the family on the terms set by the black market.”
A previous version of this article misstated that Daniel Bracho '21 explained several factors that make it difficult for Venezuelan students to attend top-tier universities. The ‘Prince’ regrets the error.