Be judicious while selecting foreign universities
The rupee has fallen 24 per cent against the dollar in the last one year and is hovering around its all-time low. Not just that. The rupee depreciated 17 per cent last year against the Canadian dollar, 16 per cent against the pound, 18 per cent against the Singapore dollar, 6.6 per cent against the euro and 13 per cent against the Australian dollar.
A falling rupee not only impacts investments and travel plans, but also students going to foreign universities.
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Now is the time when students prepare to join foreign universities. Almost all costs, right from living expenses to fees and visa charges, have shot up. The cost of a student visa to the UK has increased from Rs 24,600 in 2011 to Rs 26,050 this year, a six per cent jump. Visa charges are revised according to the movement of the rupee, and the currency rate the consulates set is higher than the market rate.
Courses in the US cost between $15,000 (Rs 8.4 lakh) and $60,000 (Rs 33.6 lakh) every year. In the UK, it is between £7,000 (Rs 5.98 lakh) and £25,000 (Rs 21.37 lakh) a year. Accommodation cost has to be paid in advance and tuition fees semester-wise.
Sameer Kenkre from Mumbai will leave for the US to pursue MBA from New York University’s Stern School of Business in August. He is concerned about the extra money he will have to shell out for his stint there. He has already paid $60,000 (Rs 33.6 lakh) for the course.
His stint is part-funded by a loan of $30,000 (Rs 15 lakh). He will carry $10,000 (Rs 5.6 lakh) for emergency purposes. His parents would remit more money as and when he requires.
Many like Kenkre will have to shell out more to fund the first instalment of their education loans. According to the retail head of a public sector bank, for the next instalment (since most universities ask for fees per semester), one can hedge their position and buy the loan in forwards. That is, one can book the loan for the next payment at a particular level of the rupee if they think the currency will depreciate further.
However, one should be cautious since dabbling in the futures markets is only for those with good knowledge of the subject.
Education consultants also suggest parents buy currency in tranches to remit to their children as and when there is a rise in the rupee against the currency of the country their children are in. This requires you to be vigilant of the rupee’s movements.
“Students are a worried lot, but there is little they can do. On an average, the costs for students have increased by at least 10 per cent," says Vineet Gupta, MD of Jamboree Education, an education company that helps students for international entrance tests. He says, in the US, costs in universities increase five per cent every year.
“I have to cut down on my expenses and look for cheap accommodation there," says Kenkre.
Gupta says for countries like the US, students have a wider choice of universities. “Be more judicious when it comes to selecting the university and the city. If you have got admission in more than one university, try and go for the economical option," he says.
People are opting for less expensive countries and for courses with better shelf life. Try to go in for courses that give you financial aid.
A country like Canada, which is fast becoming a popular option, is cheaper as the institutes are publicly funded and the cost of living is low.
Since one cannot compromise much on the universities and the courses, cut down on day-to-day expenses and also try and make the ‘odd buck’ by picking up part-time jobs, if you can, since not all universities permit you to work.