Falling rupee, rising costs, job insecurity dampen study-abroad sentiment

Mass layoffs by tech biggies add to concern, but demand from non-metros robust

Ashish Gadani (name changed on request), 22, was supposed to be in the US in September for the Fall semester for an MSc in computer science. But a delay in visa meant that he would now have to fly in January 2023 for the Spring intake.

"I am now having second thoughts about studying abroad, given how costs have gone up on multiple fronts,” says the Mumbai-based engineering student who wishes to keep his university in the US unnamed. “My education loan, which would have been Rs 1.5 crore until earlier this year, now stands at nearly Rs 2 crore due to rupee depreciation and rise in tuition fees."

Gadani is one among many students who are either deferring their admission to the Fall 2023 season or altogether dropping the idea of studying abroad.

The reasons range from visa delays adding to rising costs and concerns over not landing a job after the course, given the mass layoffs by some of the world’s biggest tech companies. The possibility of a global recession in 2023 isn’t helping.

"We had processed a record number of 2,500 applications for the Fall semester this year. Of these, more than 300 could not make it due to visa delays,” says Adarsh Khandelwal, co-founder and director of Collegify, a Delhi-headquartered overseas education consulting platform. “Parents and students are now preferring to opt for a gap year and wait to see how the situation evolves. Also, many of those who already have domestic education loans have dropped the idea of going overseas for further education."

From tuition fee to accommodation and other living expenses, consultants estimate a 15-20 per cent average rise in cost.

"There has been a 20 per cent change in overall costs, which is not restricted to accommodation. Bills and amenities, too, have gone up," says Mayank Maheshwari, co-founder and chief operating officer, University Living, a global student accommodation marketplace. This is especially true of Europe and the UK because of the geopolitical situation in the region, he adds.

Some universities, meanwhile, are making concessions and offering additional scholarships and discounts. "Universities and, more importantly, the governments of these countries are competing for the same talent pool,” says Akshay Chaturvedi, founder and CEO, LeverageEdu and Fly Finance, an overseas education consultancy and finance firm. “The way they respond amidst these macro-changes will help them benefit in the long term."

Other costs like air fares, too, have increased by 50-60 per cent in recent months.

"Even air fares that were below Rs 1 lakh to Rs 1.10 lakh are now hovering at Rs 2 lakh and above,” Khandelwal says. “We are already advising students who have landed in the US for the Fall semester to book their summer vacation flights back to India right now."

Meanwhile, those who are still eager to study overseas are either applying for loans despite rising costs or are looking to study at relatively cost-effective destinations.

According to a “Higher Education Abroad” report by consulting firm RedSeer, the number of Indian students opting for higher education overseas grew from 440,000 in 2016 to 770,000 in 2019 and is set to grow further to roughly 1.8 million by 2024.

LeverageEdu claims numbers are continuing to grow exponentially, the stress notwithstanding. "We are processing more than 15,000 applications every month, which is already 3x of where it was three months ago for the September intake," says Chaturvedi.

Nonetheless, the US, UK, Canada, Australia and New Zealand remain the top destinations, besides some other European countries, with minor shifts in the upcoming Spring intake season.

Maheshwari says while financial planning has changed a bit for students, many are still interested in going abroad “because the benefits far outweigh the higher cost burden”. He says this spike in interest is largely coming from tier 2 and 3 cities. “We have witnessed an increase of about 4x in loan applications (from smaller cities)," he says.

Meanwhile, those deferring to next year's Fall semester are also doing so because of the large-scale layoffs, especially by tech majors in the US. Khandelwal adds that besides the layoffs, the freeze on hiring by some tech majors would also affect international students in 2023, dampening spirits.

"Along with the apprehension of a recession, the mass layoffs happening at big companies have led to concerns around job security,” he says. “There is comparatively less chance of students bagging a decent job, which defeats the whole purpose of going to the US and spending so much money.”

Costly class

• Average 20% rise in costs
• Tuition fee up 10%-20%
• Average tuition fees in the US: $60,000 to $70,000 per annum
• Other costs like airfares up by 50-60%
• Loan applications from smaller cities up 4x, say consultants