Study Abroad: How are YOU coping with the falling Indian Rupee?
How are Indian students aspiring to study abroad coping with the fall in the rupee against the US dollar?
It is a difficult time for students who want to study abroad. With every fall in the value of the Indian Rupee against the US Dollar, their dream of making it to an international university of their choice seems more distant.
The Indian Rupee, which was quoting at Rs 54 to a dollar at the beginning of the year, slipped to Rs 61 to a dollar recently. It currently trades between Rs 59 and Rs 60.
In effect, an Indian student will have to spend approximately Rs 6 more to buy a US dollar today, compared to what s/he would have paid at the beginning of the year.
Here's what this means: A two-year course in a US university that would have cost $ 50,000 or Rs 27 lakh (assuming Rs 54 to a dollar) at the beginning of the year would now cost Rs 30 lakh (assuming Rs 60 to a dollar).
It is this difference that is weighing heavily on the minds of students and their parents.
Rediff.com spoke with Harish Kulkarni, who has secured admission at San Jose State University, California, and will be flying there this August, to find out how the Rupee's fall is affecting his study abroad plan and how he and his parents are coping with the increased cost.
Over to Harish:
I completed my BTech in 2010 from Mahatma Gandhi Institute of Technology, Hyderabad affiliated to Jawaharlal Nehru Institute of Technology. I am from Kadapa (formerly Cudappah) district in Andhra Pradesh.
Study abroad plans:
I am planning to go to San Jose State University, California this August to do my Masters in software engineering. I am going to pay some $ 15,810 per year. This is a two year (four semester) course.
Once I go there my monthly expenses will be $ 800 per month -- lodging, travel and food expenses. The total cost of the two-year course would come to about $ 50,000.
How has the fall in rupee affected your budget?
I have taken an educational loan to pay for my tuition fees from the State Bank of India and my parents have agreed to finance my monthly living expenditure of $ 800 per month. I will be paying the margin money -- the part of the money that a borrower has to chip in with for availing a study loan -- from what I have saved by working for three years at CSC (Computer Sciences Corporation).
When I approached the State Bank of India they agreed to pay my entire tuition fees before the steady decline in the rupee's value. But now the bank branch manager is saying that they will be financing my overseas education for three semesters only.
I am trying to figure out a concrete plan on how to finance my fourth semesster. As of now I have decided to work in California and if that does not work out then I will have to depend on my parents.
Including the base rate, the State Bank of India is charging me 11.75 per cent on my study loan. Repayment period is 3 years after I complete my course.
While the rate of interest has not been affected by the fall in the rupee, they are now willing to finance only three-fourths (75 per cent) of what they had promised. However, there is no written agreement that they will give me that 75 per cent also. If the rupee continues to fall further I am assuming that the total loan amount will also go down.
I have signed a few documents which state that they can give me a loan of up to Rs 14 lakh (Rs 1.4 million). The remainder -- Rs 4 lakh -- will be paid from my savings.
If the rupee falls further, this Rs 14 lakh won't be enough to take care of even the three semesters.
Adjustments you are making to cope with the rupee's fall:
Like i mentioned earlier, I am planning to work there. Earlier, I thought that the bank loan and my parents' financing would suffice. Though my father has kindly agreed to pay for my living expenses I don't want to put more burden on him.
How are your parents reacting?
Of course, they are bothered. They know that whatever they had saved to provide for my living expenses will not be enough now and the situation will worsen further if the rupee's downfall continues.
But I have made my decision to go abroad for further studies, and that will not change.
All the admission formalities have been done and I have secured my admission at San Jose State University, California.
I worked for three years with CSC and saved some money which I used to finance my TOEFL exam, air tickets and all that. I have spent more than Rs 1 lakh till now.
Reader Invite: How to fund your overseas education?
Is the weak Indian rupee pinching your pocket?
In the last few weeks, as the rupee tumbled over 61 to a dollar, students aspiring to study abroad have been the worst affected.
Because of this fall, the average cost of overseas education (in rupee terms) has gone up by 10-15 per cent which has increased the woes of students and their parents who will now have to shell out an additional Rs 2 to 5 lakh per year for studying abroad.
Needless to say, parents and students are looking for alternate funding options to meet the additional cost of education.
While merit based scholarships seem like the ultimate solution, the eligibility criteria of most of these scholarships ensures that of the lakhs of students who apply for the grant, only few students make the cut.
Dear readers, how are you coping with the increasing cost of overseas education in this backdrop? Tell us what are you doing to meet the additional expenditure?
What can students and parents do to reduce their cost of studying abroad? What are the scholarships or funding options they can avail of?
Share your suggestions and experience and help our young readers make an informed decision. You can e-mail your ideas, suggestions and advice to us at firstname.lastname@example.org (subject line: Study Abroad Advice) and we'll publish the best responses right here on Rediff.com.
Image: Harish Kulkarni
Photographs: Harish Kulkarni