US university dreams go farther from reach with tumbling rupee

Indian students who wish to study abroad dread their American university dream may end up remaining just a fantasy, with the rupee touching a new record low every other day. Aspirants will now have to garner more funds for their studies. Others will have to change their dream destination.

Financial institutions feel the concerns are genuine and the requirement for education loans will go up. Study abroad consultants, on the other hand, believe students don’t really have much to worry about, especially those who plan to work in the US post completion of their studies.

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What do the students have to say?

“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 US, told PTI.

“For my other friends, a change in choice of 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 do not have the option. However, I feel the ultimate cost will further shoot up till I land there and ultimately graduate,” he added.

The rupee hit a fresh all-time low last week, touching the 80 mark against the US dollar.
According to official statistics, over 13.24 lakh students from India went abroad for higher studies with most heading to the US (4.65 lakh), followed by Canada (1.83 lakh), the UAE (1.64 lakh) and Australia (1.09 lakh), among others.

Loan lenders’ perspective

Arijit Sanyal, MD and CEO, HDFC Credila, believes a depreciating rupee would indicate a rise in the cost of education for an Indian student aspiring to study overseas. “From an education loan lenders perspective, this would result in larger ticket sizes as a borrower would need to avail a higher amount to cover overarching expenses, including the tuition fees and ancillary costs. However, a borrower who is at loan repayment stage during this time might find it easier to mobilise funds if they earn in dollars,” Sanyal said.

Tuition fees and living expenses constitute the two main components of students expenses while studying abroad. The rupee facing a losing streak translates to increased fees and cost of living as a dollar would cost more in terms of rupee than earlier.

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According to Prashant A Bhonsle, founder of Kuhoo Fintech, an online student loan platform, the costs are much higher for students planning to study in the US as they have to pay the tuition fees and living expenses in dollars. The euro and British pound have appreciated against the rupee and, as a result, have reduced the cost of education for Indian students in the UK and Europe.

“It is a good news for the Indian students who passed out and started working and earning dollars and sending the money back to India either to pay their loans or expenses in India,” he said.

Historical data comparison can capture the significant increase in burden propelled by the rupees depreciation. An Indian student who paid a fee at an exchange rate of around 65 rupees per dollar in 2017, might end up paying 77-80 rupees per dollar now.

Avinash Kumar, founder, Credenc.com, said the cost of everything, from tuition fees to living expenses to travel tickets, increases every time the rupee tumbles by certain points.
As per the most recent fall, rupee has touched 79.83 against the US dollar. So, a student whose semester fee was $40,000 paid Rs. 29.52 lakh in January 2022, when the rupee was at 73.8 to the dollar. Today, she has to pay Rs 31.92 lakh.

Also Read: Rupee declines by 9 paise to hit all-time low of 79.90 against US dollar

With living expenditure of around $9,000 per semester (Rs 7,18,000) and travel expense (Rs 90,000-1,00,000), you are looking at a whopping expenditure of Rs 41 lakh for one semester, he explained.

Foreign university still beckons

Higher education consultants feel that studying abroad is a well thought out decision and is not likely to change quickly with the rupee’s volatility.

“Most of the students take loans according to the institute’s fees. So, if the fees increases in rupee terms, the lenders do consider it and increase the sanctioned amount. In fact, students who had taken a loan 2-3 years back can now pay it back easily with their earnings in dollars,” said Sumeet Jain, co-founder, Yocket, a platform for study abroad aspirants.

Similarly, Saurabh Arora, founder and CEO, University Living, global student accommodation managed marketplace, said students are still choosing to study abroad. It’s just that they now prefer new destinations where the tuition fees and the cost of living are a little cheaper, like France, Germany, Portugal, Italy and Spain.

Also Read: Rupee hits all-time low of 79.60 against US dollar, with 15 paise fall

Vibha Kagzy, founder and CEO, ReachIvy.com, said: “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.

(With inputs from agencies)