American university dream seems far-fetched for aspirants after rupee hits record low
New Delhi:
With the rupee touching its new all-time low every other day, students studying abroad in India fear that their American university dream is on the verge of going ahead as they will have to spend more money or relocate to the destination country of their choice. Where it is comparatively cheaper.
While financial institutions feel that the concerns are real and that the need for higher amounts of education loans will increase, study abroad advisors believe that students need not worry, especially for those pursuing their studies. After completion, plan to work in the US.
“As the rupee depreciates to a new record low against the US dollar, it is a matter of far-reaching concern among students studying abroad. The weakening of the Indian currency against the US dollar has led to students’ foreign education plans. This will have a deep impact and the financial burden will increase, Pushpendra Kumar, who is planning to study law in the United States, told PTI.
“For my other friends, a change of country choice may work, but for me, it may not consider long-term plans. Every country has a different legal system in which to practice as a lawyer. Different knowledge is required. I am not an option. However, I think the final cost will increase until I get there and eventually graduate.”
This week, the rupee touched an all-time low, touching the 80 mark against the US currency.
According to official figures, over 13.24 lakh students from India went abroad for higher studies, with the maximum being the USA (4.65 lakh), followed by Canada (1.83 lakh), UAE (1.64 lakh) and Australia (1.09 lakh). , among others.
HDFC Credila MD and CEO Arijit Sanyal believes that a fall in the rupee will signal an increase in the cost of education for an Indian student aspiring to study abroad.
“From an education loan lender’s point of view, this would result in sizable stamps. A borrower would need more to cover exorbitant expenses, including tuition fees and ancillary costs. However, during this time the loan is in the repayment phase. It may be easier for a borrower to raise funds if they earn in dollars,” Mr. Sanyal said.
Tuition fees and living expenses are the two main components of students’ expenses while studying abroad. The rupee facing a depreciation, increased fees and cost of living will translate to higher in dollar terms than in rupee terms.
According to Prashant A Bhosle, founder of Kuhoo Fintech, an online student loan platform, the cost for students planning to study in the USA is very high as they now have to pay tuition fees and living expenses in dollars. Conversely, the Euro and GBP have appreciated against the rupee and, consequently, lowered the cost of education for Indian students in the UK and Europe.
“This is good news for Indian students who have passed out and started working and earning dollars and sending money back to pay their loans or expenses in India,” he said. Told.
Historical data comparison can capture a significant increase in burden induced by the falling value of rupee.
An Indian student, who had paid fees in 2017 at an exchange rate of around Rs 65 per dollar, may now have to pay Rs 77-80 per dollar.
Avinash Kumar, Founder, Credenc.com said that from tuition fees to living expenses to travel tickets, the cost of everything increases every time the rupee falls.
As of the most recent fall, the rupee touched 79.99 against the US dollar, so a student whose fees for a semester was $40,000, was paid Rs 29.52 lakh in January 2022 when today 1 USD = 73.8 INR to Rs 31.92 lakh will have to pay. With living expenses of around $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 a semester, he explained.
Study abroad consultants feel that studying abroad is a well-informed decision and is not likely to change quickly.
“Most of the students who are taking loans are taking fees wise. So if the fees increase in terms of Rs., the lenders consider it and increase the sanctioned amount. Had taken the loan, they can easily repay it. Their earnings in dollars,” said Sumeet Jain, co-founder, Yoket, a platform for study abroad aspirants.
Similarly, Saurabh Arora, Founder and CEO, University Living, a global student housing managed marketplace, said that students are still choosing to go abroad. It’s just that they are choosing to move to new destinations where tuition fees, standard of living and costs are a bit cheaper, such as France, Germany, Portugal, Italy and Spain.
Vibha Kagji, founder and CEO of reachIV.com, believes that even after the pandemic, students’ aspiration to study abroad has become bolder than ever, and it is unlikely that exchange rates will dampen it.
“Changes in the global economy are the norm. America has been a study abroad destination because of the ease of communication in English and the abundance of opportunities. European countries have also caught up and are on par. Arguably, their tuition is more lucrative, as are their financials. There are support options,” she said.