For Indian families planning to send their children abroad for higher education, the Reserve Bank of India (RBI)'s latest move could affect the costs. This is because a weaker rupee can significantly increase the cost of tuition fees, accommodation and everyday expenses.
The RBI has introduced strategic currency-stabilisation measures aimed at stabilising the rupee and easing pressure on the foreign-exchange market. These include a special dollar-supply window for state-run oil marketing companies (OMCs) and tighter regulations on foreign-exchange derivative transactions.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
These steps, addressing immediate dollar demand and curbing currency volatility, could provide temporary relief to families making payments to foreign universities.
Also Read: Personal Loan Closed, But CIBIL Score Unchanged? Here's Why
But rising education costs and changing immigration policies in popular destinations such as the United States, the United Kingdom and Canada continue to influence students' decisions.
The depreciation of the rupee has added to the financial burden on families funding overseas education. The total cost of popular courses has reportedly increased by around Rs 3.5 lakh to Rs 4 lakh over the past year, putting additional pressure on middle-class households.
According to data cited by The Economic Times, the rupee has depreciated 4.9% against the US dollar, nearly 2.5% against the euro and 3.3% against the British pound so far this year. When combined with global tuition fee inflation, the overall increase in overseas education costs is estimated at 7% to 11% annually in rupee terms.
This means students and their parents may have to arrange substantially more money to pay the same tuition fees and living expenses in foreign currency.
How Could The RBI's Latest Move Ease Study-Abroad Costs?
When the rupee weakens against a foreign currency, Indian families need more rupees to purchase the same amount of dollars, pounds or euros. This directly affects tuition payments, rent, food, transportation and other expenses incurred overseas.
Following the RBI's intervention, the rupee reportedly strengthened to around Rs 95.76 against the US dollar, recovering from its previous close of Rs 96.73. Such a movement can temporarily reduce the rupee cost of dollar-denominated payments, provided the exchange rate holds when the transaction is made.
For instance, a student who needs to pay a university fee of $30,000 would require approximately Rs 28.73 lakh at an exchange rate of Rs 95.76 per dollar, compared with Rs 29.02 lakh at Rs 96.73 per dollar. This represents a difference of around Rs 29,100.
US Vs UK Vs Canada: What Should Students Consider?
Although currency stabilisation could help Indian students across destinations, country-specific visa rules, employment opportunities and other policy changes remain important factors when deciding where to study.
1. United States
The US remains a popular destination for Indian students, but changing immigration policies could add to the cost and uncertainty of studying there.
The US Department of Homeland Security proposed a $70,000 fee on October 7 for initial Optional Practical Training (OPT) applications and a $30,000 fee for subsequent or STEM OPT extensions. The proposal could significantly affect the financial calculations of students hoping to gain work experience in the US after graduation.
The proposal also comes amid concerns about long-term employment and immigration pathways, particularly following suspensions of the permanent labour certification (PERM) process at eight major companies, including Microsoft, Cognizant, TCS and Infosys.
2. United Kingdom
The UK has also become a more challenging destination for some Indian students amid changes to post-study visa rules and the depreciation of the rupee.
Indian student enrolments have declined by 76% across most UK universities. The sharp fall in the rupee has compounded the challenges facing both prospective students and those already studying overseas.
Also Read: No Inheritance, Savings Or Generational Wealth At 20: Can You Still Create A Rs 5 Crore Portfolio
3. Canada
Even Canada has tightened its international student admission framework by increasing the financial requirements for students.
The minimum proof of living expenses has increased to 22,985 Canadian dollars, alongside tighter annual caps on international admissions. These requirements can raise the amount students must demonstrate they can afford before travelling to Canada.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
