Students from India who are aspiring to study abroad are facing triple challenges of a slowing job market, unprecedented inflation across the world and rupee depreciation. It is a big question of what the students, Indian and foreign universities as well as the government and policymakers can do to help students pursue their goals of international higher education.
The foreign education sector is completely shaken by the tremors of the falling Indian currency against the US dollar. The steep fall of the Indian rupee against the dollar is impacting the plan of Indian students to study abroad as it accounts for increased tuition fees and living expenses.
Moreover, the record inflation in the US has increased the cost of living even though the minimum wages remain the same. An economically unviable situation has been created for Indian students who wish to pursue undergraduate or postgraduate programs overseas.
The Reserve Bank of India has also recently hiked interest rates on educational loans which means for an average Indian student aspiring to enrol in an American University, the loans are larger with larger EMIs and with lesser stability in the job market putting their dream of study abroad at risk.
The exchange rate cannot be easily controlled but some practical actions can be taken collectively by the foreign and Indian universities, policymakers/government and the students to offset the effect of the depreciating rupee.
Students who select the right loan type, the one with a floating interest rate can manage the financial burden to some extent. Innovative schemes have been offered by many Indian banks and financial institutions to protect education loans against fluctuating exchange rates.
Students who wish to pursue their education in traditional higher education destination countries such as the US or the UK can avail of top-up loans either from their existing lender bank or explore a different bank or non-bank financial company.
A top-up loan may seem a good option but the repayment terms may not be affordable for everyone and might require that the borrower pledges collateral. Students who are still in the process of choosing a study destination can work on evaluating non-traditional destinations such as France, Germany, Austria, Norway and Spain as they offer good quality education cost-effectively.
Students should also work on availing on- and off-campus employment opportunities and most visas permit employment. It is a common practice for students to take up campus jobs, internships, research or teaching roles to fund their education.
This method will help in paying back a sizeable chunk of the increased fees. On the other hand, foreign institutions are also concerned about Indian students reconsidering their decision to enrol. Universities, therefore, could help ease the cost pressures by increasing the number of grants and scholarships.
This will help produce high-quality education for deserving students at affordable rates while achieving their capacity utilization targets. International students are offered fully funded scholarships and financial aid by many countries such as Germany.
Universities can also work on tying up with local banks and financial institutions to provide low-interest loans easily for international students. Universities will also be provided with a competitive edge in attracting students which will provide the students with peace of mind about getting a loan that could be disbursed and repaid in US dollars.
This will mitigate the risk of currency fluctuation in the future. The focus must also be given to twinning or offering dual degrees by the Indian universities and new programs and disciplines and international faculty must be added to ensure that the students get the desired international higher education in their homeland.
The Higher Education Finance Agency is also a welcome step which will provide finance to premier educational institutions for creating innovative ecosystems and high-quality infrastructure. Moreover, more investments in research and development are urgently required to uplift the standard in higher education.