Paying for a Gap Year

Whether you are a student or parent of a student interested in a gap year you are probably trying to figure out how (and why) you should pay for a gap year when you’ve got college tuition to worry about. This is a totally reasonable concern. However, a well-planned gap year does not require you to spend thousands of dollars. Some of the most transformative gap years are also the most affordable.

You may find that a gap year actually helps to save you money. According to data from the nonprofit Complete College America, only 20 percent of students complete a bachelor’s degree in four years. Only 57 percent of students who enroll in college will graduate in six years. That means there is a very high likelihood, that students entering college next year, right out of high school, will take longer than 4 years to graduate, accruing more debt as a result. In contrast, research has found that students who take a gap year are more likely to graduate in 4 years or less. A gap year allows students to explore possible career or major options, work a minimum wage job (gaining critical perspective on the opportunity value of a college degree), travel, and often take a much needed break from academia for their personal mental health. The result is a more mature, focused, and generally well-prepared student entering college.

Work Work Work

Self-funded gap year travel is much more affordable than most peer-based travel programs. I paid for 2 months in Australia, New Zealand & Fiji by babysitting and working at a frozen yogurt shop for a year. Working to pay for your own travel makes the experience more meaningful, because you know how hard you worked to get there. Funding your own travel experiences also means you will likely be more frugal and make better choices when spending money during your travels.

Working during the summers throughout high school could allow you to save up enough to spend your entire gap year abroad. Many students spend part of their gap year working while living at home to fund travels during the second half of their gap year. There are also opportunities to work while you travel during your gap year through programs such as Work Away or Woofing.

Consider the Cost

Destination matters when paying for a gap year - Southeast Asia, Central, or South America are less expensive than Australia, New Zealand, or Europe. Staying in one place is cheaper than hopping from one destination to the next. You don’t have to leave the United States (or your home country) for an epic gap year travel experience! The cost of your airfare will take up a big portion of your gap year budget. Instead of planning a round the world trip, spend several months getting to know the hidden gems and off the beaten track places of a country or continent. A few months of volunteering followed by several weeks of independent travel is a great way to immerse yourself in local culture without spending a ton of money. Use local transport options and eat local food (or cook your own food) for a more authentic experience. Staying in hostel dorms, with family, friends, or camping will cut your expenses a considerable amount.

Start Planning Early

Fully funded gap year opportunities often have earlier application deadlines, so start researching opportunities during your freshmen - junior years so that you can anticipate application deadlines. Do your research and find a scholarship or program that really suits you and your gap year goals. Work hard on your application, and ask someone to read over your essay if one is required. Be sure to allow enough time for any references or recommendations to craft a thoughtful letter of recommendation for you.

Some universities, such as University of North Carolina Chapel Hill, Florida State University, and Tufts University offer gap year programs with merit and/or need-based scholarships to fund some admitted students’ gap year experiences. If you are considering applying to a school that offers a gap year program, get in touch with the school’s Office of Admissions to find out what you need to do to be considered for their gap year program.

Be Proactive

In order to increase accessibility, more and more gap year programs are offering financial assistance and need-based scholarships. Not all programs spend money to advertise their financial aid though. If the program you are interested in does not specifically advertise financial aid, reach out to ask if they do offer scholarships or financial aid. If you are planning an independent gap year, but need some help with planning details, many Gap Year Consultants (myself included) offer need-based assistance or scholarships for their advising services.

More students are interested in having an internship experience during their gap year. If you have a particular career or job that interests you because of someone you know that does it, ask them if they might be able to help you secure an internship during part of your gap year. Be sure and make it clear you’d like to gain real experience and an understanding of what a career in the field is like. You shouldn’t waste a semester in an unpaid internship if all you will be doing is making coffee (unless you are interning at a coffee shop).

Don’t Give Up

If you don’t get that scholarship or internship you had been hoping for, don’t give up! Failing and learning to bounce back is an important part of growing up. I have found that when things don’t go as planned I am usually pleasantly surprised with the result, and I’ve learned to become more adaptable and resilient because of my failures.

Maybe you’re reading this because you didn’t get in to any of the colleges to which you applied and you find yourself facing a gap year by default. You didn’t plan for one and haven’t saved for one. All is not lost! Many organized gap year programs have begun partnering with community colleges or universities to offer college credit options for gap experiences. The catch is, if you are admitted to a college and choose to defer your admission for a gap year, most schools stipulate that you cannot earn college credit during your gap year. Therefore, you can only take advantage of the opportunity to earn college credit during your gap year if you have not deferred admission for the following year. Getting practical or travel experience while earning a semester of college credit is a pretty good silver lining! Some programs that offer college credit can also be paid for using a 529 college savings plan.

If you are planning to re-apply to colleges during your gap year, it is important that you plan ahead and allow enough time to dedicate to applications / interviews. Work on applications over the summer and have them all ready to submit if you will be traveling during the fall semester. Use your gap year to learn more about yourself, your interests, skills, and goals for the future. If you approach your gap year with the right intention, it won’t be a waste of time or money, but a wise investment in your future.

Scholarship Resources:

Gap Year Association

GoOverseas

GoAbroad

Managing Money During Your Gap Year

My love of travel over the years has taught me to be smart about managing money. I made some mistakes early on (ie. not understanding exchange rates and drastically overpaying for souvenirs). Yeah, they were learning experiences, and that is part of a gap year -- you are free to make mistakes and learn from them. Another core lesson I learned from traveling: heed the advice of people who have been there before me. Hopefully some of the lessons I learned throughout my years of traveling can help you to save some money and make smart financial choices during your gap year. 

Make a Budget (and stick to it!)

How much money will you need for basic necessities (food, lodging, transportation)? I have found the Lonely Planet budget suggestions (Divided by: Budget, Midrange, Top End) to be pretty accurate. Figure out which category suits your travel style, and multiply that by the number of days you plan to travel in that region. ie. $30 per day in South America will mean you can expect to stay in hostels, prepare most of your own food or eat at inexpensive local markets, and walk or take public transportation.

Keep track of your expenses and if you accidentally go over one day, expect to cut back your expenses another day to make up for it. If you have trouble sticking to your budget, try only taking enough money with you that you have allotted for that day.  Store your remaining money securely in a locker in your hostel. If there is no locker, or if you are in a private room, stash your extra cash and valuables inside a backpack or bag with zippers. Lock the zippers to one another with a small combo lock. 

There will undoubtedly be excursions or more costly activities you'll want to participate in during your gap year. If you can swing it, add an extra cushion to your budget for that Amazon experience or trek to Machu Picchu. Plan ahead so you don't have to miss out on a once in a lifetime opportunity. Research companies (or ask your gap year advisor for recommendations) to ensure you get good experience from your investment. 

If you are already on a shoestring budget, consider looking into work or volunteer opportunities that might subsidize your housing and food costs for a portion of your gap year. Authentic encounters where you get to spend meaningful time with locals are often the most memorable parts of a gap year experience. You'll be able to save up cash that you can use for the more "touristy" parts of your gap year.

Me during a week volunteering at an elephant conservation center in Thailand

Accessing Cash

Traveling with up to $200 cash in newer bills as a back up fund is a good plan, especially if you are traveling independently. Though I do not recommend bringing all of your budget in cash. You run the risk of having it stolen, plus you will waste money on exchange fees each time you exchange USD to local currencies. No matter where you go, you will see money exchange businesses that advertise "no commission" or "no exchange fees". This is not true! Do not be deceived. Currency exchangers make money by giving you an unfavorable exchange rate. The exchange rates offered at currency exchange booths are rarely, if ever, competitive to those offered by banks when you withdraw cash from an ATM.

Bring a debit card with a chip to withdraw local currency from ATMs. Visa tends to be the most widely accepted, though MasterCard is also an option. I typically recommend participants also bring a back up credit card (Visa or MasterCard with a chip) for emergencies (or in case the debit card is lost, stolen, or does not work). Be aware of the fees that your bank charges for accessing an ATM that is not affiliated with your bank, as well as foreign transaction fees and conversion fees. These can really add up. I suggest withdrawing larger amounts (no less than the local currency equivalent of $100) to minimize the frequency of your withdraws and fees assessed by your bank. 

If you plan to do a lot of traveling, or for a long period of time, you might consider opening a checking account with Charles Schwab or Fidelity. Both offer checking accounts linked to brokerage or mutual funds with free ATM withdraws worldwide.

Store your extra cash and backup credit card separate from your debit card and money you have allotted to spend for the next few days. If something is lost or stolen you will have a backup plan. Many debit and credit cards now come with access to block your cards via your online account. If you can't do this, be sure you have the account numbers and international customer service numbers noted somewhere so that you can immediately report the loss if this happens. 

Ways to Stretch Your $$$

• Take a re-usable water bottle (and Steripen if you won't be able to drink the tap water)

• Bring your water bottle with you, always

• Minimize your alcohol consumption (alcoholic beverages are often as expensive as a meal)

• Travel like locals (bus, subway, bicycle, by foot) Only take taxis when necessary or for safety

• Stay in hostels or locally owned guesthouses

• Bring a quick dry towel and combo lock to avoid having to rent them

• Eat like locals / Shop at local markets and cook your own food

• Avoid touristy areas for meals (quality is usually poor and prices are inflated)

Be frugal but don't obsess over every dollar. Don't miss out on once in a lifetime opportunities. When in situations where bargaining is culturally appropriate, bargain, but consider the significance of that amount of money to you compared to the person with whom you are bargaining.