Students studying abroad, aspirants worst-hit by rupee slump

The depreciating rupee has no doubt cast a cascading effect on the economy but the worst-hit are Indian students studying abroad or those planning for higher studies in foreign universities as they have to shell out more money compared to what it was required a year ago.

As the rupee has weakened by about 20 per cent since the beginning of the calender year, overseas education costs have also gone up almost equivalently.
"The conditions have turned 'foreign education' a luxury affair, not something for the middle class to think as parents have to slog out a lot more money compared to earlier to get their children into good universities," says Neha Racch, senior counsellor at Apex Consultants.

The rupee coupled with a slowing global economy, strict visa norms and stringent immigration policies have made the prospects of overseas education more gloomy, she says.

"And the impact is quite visible as there has been about 20 per cent decline in the number of students applying for higher courses in the US, the UK and other countries," Rachh told PTI.

The rupee has fallen by 20 per cent against the dollar since January and by as much as 24 per cent since last year.

Moreover, the steep depreciation has made the rupee a much weaker currency against some major currencies. The rupee has fallen by around 18 per cent against the Singapore dollar, 17 per cent against the Canadian dollar, about 16 per cent against the British pound and 13 per cent against the Australian dollar.

Rupee depreciation is more detrimental for middle class families as on several occasions, they take education loans in order to make payments of fees, experts feel.

"With increase in cost of fees in rupees, interest on such loans puts further burden on the students and their families," says Anis Chakravarty, senior director, Deloitte in India.

Now a lot of planning, saving and investment will be required from families to shoulder expenses of their children's foreign education, says Suchitra Surve, director at Growth Centre India, an education counselling centre.

"Applying for loans and scholarships will be essential. Identifying the right university and course is crucial, so that the chances of seeking admission to the right university is optimised, thus saving on the application process money as well," Surve points out.

Concurs Sumit Vohra, an education expert, saying, "The cost of education has gone up by about 20-30 per cent because of the fall in the rupee's value, thus a proper planning is required and those who can afford and those who have that real passion to study should go ahead with their plans."

However, some aspiring students believe they can supplement the rising education cost by working part time in the countries they choose to pursue their courses.
"I know the costs of education has gone up. I don't belong to a rich family but my parents have agreed to pay for my management course in Glasgow University," says Ankit Bharadwaj who has completed his graduation from Delhi University.

"I am confident that I would get some kind of part-time job over there, it would help supplement my living costs there," he says.

However, experts feel it is not so easy to get a job in a foreign country right now and especially when in the UK where the student visa norms have been revised.

In April, the UK government withdrew the visa option for non-EU students to stay in Britain to work for up to two years post-graduation. Now students must have offers of graduate- level jobs, paying at least 20,000 pounds a year, prior to the expiration of their student visas if they wish to stay on to work.

"In this format, thinking of getting a job would be very foolish," says Vohra.
More than 2.6 lakh Indian students are currently studying abroad. While more than one lakh students are pursuing higher studies in the US, followed by the UK and Australia.

According to the Immigration Department of Australia, 14 per cent all international students studying in the country were Indian nationals whose number reached 27,500 in 2011-12 academic season.

"But there is a significant decline in the number of Indian students applying for higher courses in foreign universities due to the weakening rupee, and we advise our clients to be patient and wait for some time," says Rachh.

"Even a minor appreciation in rupee could save thousands of money for students," she says, adding we have helped many students to save Rs 25,000 to Rs 35,000 by paying on a day when the rupee recovered from its previous lows as against the dollar.

Meanwhile, some experts have also questioned the utility of these foreign education, given the poor global economic situation and the poor condition of US and European labour markets.

"There is a need to review the utility of foreign education particularly since it is becoming increasingly difficult to get an overseas job," says Dhiraj Mathur, Executive Director of PWC India.