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How Does the Falling Rupee Against Dollar Affect Study Abroad Aspirants?

Posted on Nov 24, 2018
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You must have an older generation parent or grandparent who will lament about the days gone by. “I used to spend 1 rupee for a rickshaw ride of 1 km. And now, look at the prices of petrol!”

Sounds familiar? Globally the inflation rate has been at a steady 3.05% while India has been scaling at around 4.5%.

The tremors of the falling rupee against the dollar are still shaking up the overseas education sector. There are enough naysayers and worrywarts who already see red. But what is the truth at ground zero? Will people put education in the backburner and focus on saving or earning more? Will this cause a drain on the Indian economy? Will the government come to the rescue? Here is a quick analysis of what the falling rupee exchange rate entails for the Indian student aspiring to study abroad.

Effects of Expensive Dollar:

Students, who are already studying abroad or are planning to go abroad, are the worst affected. First, their cost of living goes up significantly as they have to arrange more rupees for the same amount of USD expense abroad. Not only the new students but also the existing students will see a significant spike in fees of their upcoming semesters. 

Studying in US universities could set you back from anywhere between $15,000 and $30,000 per year. Note: This is just the tuition fee. Take another $15000 per year for living expense at a top school in the US. Higher education would add up to $30,000 to $50,000 per year. This is a huge amount. The total course would cost anywhere between $40,000 and $80,000. In India, most parents fund their children’s education from their savings. Any depreciation in rupee adds to their woes as they have to dip further in their savings.

On the flip side, students who have already completed their studies, and are about to begin repaying their loan will gain from rupee depreciation.

In recent times, the government has directed banks to be more liberal in education loans and this has helped students. Even though the loan rates are still higher, there is a real chance of getting loans for education abroad. This is a major help.

What do you do to protect yourself from the declining rupee?

While it is true that you cannot stop the rupee from sliding down, you can do some things to protect your monetary interests.

1. Check with banks for schemes to protect your education loan. Banks and financial institutions have many interesting and innovative schemes to manage your money against the fluctuation dollar rates.

2. Look at long-term prospects. An education at a premier institute abroad may seem costly at the first glance, but it yields the best return on your investment.

3. If finance is a serious constraint, consider colleges in other countries that offer the best bang for your buck. You can look towards other countries offering high quality education such as UK, Canada, and Singapore. While US ranks high on the preference list of most students, there is merit to choosing countries where the price point is not too high, and the value-add is excellent.

4. Look for scholarships to fund your study abroad. Many top-ranked colleges abroad offer scholarships to deserving candidates.

5. Also look for part-time work at the college to fund your educational loans. It is a common practice for students to take up campus jobs, internships, teaching or research assistant roles to fund their education. Not just that, even by keeping a check on your budget and lifestyle, you can save a lot of money.