New Delhi: Study abroad aspirants in India face a tough time attending the universities they want to as they will need to pay more money or change their preferred destination country to one that is comparably cheaper due to the rupee regularly striking its new all-time low.
Rupee ended Thursday at 79.99, at the brink of being 80 per US dollar. The currency has already experienced a new all-time low 27 times since Russia invaded Ukraine in late February, and each day last week has ended with a record-low value.
Parents borrowing education loans at a higher rate
MPower Financing’s Mr. Ashwini Kumar, General Manager (India) and Vice President of MPower’s India (office) told the Free Press Journal that the rupee falling against the dollar has a huge impact on the ability of students to borrow education loans, especially when they are going abroad. “Fall of the rupee against the dollar has a substantial effect on students’ overseas education plans since they are not only using it for their studies but also to manage their cost of living. But at the same time, it is important to note that students pan out their study abroad plans over a couple of years. So even though it might be a burden, it does not make sense to them to suspend their plans to study abroad for a temporary fall of the rupee against the dollar,” said Mr. Kumar, who added that since parents generally don’t have a sense of the longevity of such situations, it dampens their childrens’ plans. “Parents are borrowing loans at a higher rate, which increases the total interest burden and the payments of these types of conventional loans are also susceptible to other types of market volatility. Such situations also impact the monthly cash flow of students, who would now be seeing a reduced number of dollars,” added Kumar.
Spending too much money on overseas education not wise; Scholarships disrupted
Some others think spending too much money on overseas education can be difficult considering the current situation. “Keeping in mind the dollar to rupee rate, I always ask parents to make sure that they are amply comfortable with the costs of sending the child abroad for education,” said Viral Doshi, the Mumbai-based education consultant who added that scholarships, which are often considered an alternative to loans have taken a hit. “When it comes to pursuing your undergraduate abroad, scholarships are rare. While Canada has some, the UK and US offer fewer scholarships at an undergraduate level. The scholarship funds have also been disrupted by the pandemic in the USA,” Doshi told FPJ.
According to official statistics, over 13.24 lakh students from India went abroad for higher studies with a maximum of them heading to the USA (4.65 lakh) followed by Canada (1.83 lakh), UAE (1.64 lakh), and Australia (1.09 lakh), among others.
Students, who have been wanting to pursue education in their dream study destinations, say considering a different country that is cheaper poses its own set of problems.
Students wishing to study abroad describe their woes
"As the rupee tumbles to a new record low against the US dollar, it ripples concerns far and wide among study abroad aspirants. The weakening of the Indian currency against the US dollar will deeply impact students' overseas education plans and add to the financial burden," Pushpender Kumar, who plans to study law in the United States, told PTI.
"For my other friends, a change in choice of the country can work but for me, it cannot, considering the long-term plans. Every country has a different legal system and it requires different knowledge to practice as a lawyer. I don't have the option. However, I feel the ultimate cost will further shoot up till I land there and ultimately graduate," he added.
What consultants have to say
“For a student whose one-semester fee was USD 40,000 earlier paid Rs 29.52 lakh in Jan 2022 when 1USD=73.8 INR, today has to pay Rs 31.92 lakh. With a living expenditure of around USD 9000 per semester (INR 7,18,000) and travel expenses (INR 90,000 to INR 1,00,000) you are looking at a whopping expenditure of Rs 41 lakh for one semester,” explained Avinash Kumar, Founder, of Credenc.com
Vibha Kagzy, Founder and CEO, of ReachIvy.com, believes that even after the pandemic, students' aspirations to study abroad have gotten bolder than ever and it is unlikely that this will be dampened by the exchange rates.
"Changes in the global economy are the norm. The US has been a study abroad choice owing to ease of communication in English and an abundance of opportunities. European countries have also caught up and are at par. Arguably, their tuition is more attractive as are their financial support options," she said.
Inputs by PTI.