Migrating students flying into a debt trap? Experts advise caution

The competition is getting tougher by the year, and the number of Indian students travelling overseas for education has been increasing rapidly increasing post-Pandemic

If you are keeping an eye on your dream courses and degrees abroad, you will know that the application season is well underway for colleges and universities in top destinations such as the US, Australia and the UK. Deadlines for most graduate programme applications have been set, with detailed requirements for statements of purpose (SoPs), original transcripts and letters of recommendation.

But as the competition gets tougher by the year, the number of Indians travelling overseas for education has been growing rapidly after Covid. And at a juncture when time is of the essence, experts strongly advise clarity of one’s needs to avoid a debt trap later in a tight job market.

Over 1.3 million Indian students travelled overseas to pursue degrees in 2022, according to figures from the Ministry of External Affairs. The number is likely to cross 1.5 million in 2023, and 1.8 million in 2024 — a 15 per cent and 20 per cent year-on-year jump, respectively — several independent studies predict.

Sameer Yadav, founding director and consultant at No Borders Consultancy Pvt Ltd, points to the growing interest of students in unconventional study destinations like Italy, Japan, Malta, and Scandinavian nations, signalling a widening of options for those looking to emigrate.

As the stream of migrating students grows steadily, it is also finding more and more youths from Tier-II and -III cities. Thomas Cook India, for instance, is witnessing a pent-up demand for student overseas forex, primarily stemming from Tier-II and –III cities.

Deepesh Verma, executive vice-president at Thomas Cook (India), says that the company’s turnover from such cities has more than doubled due to increased income levels, a strong desire to study abroad, readily available student loans, the surge in digitisation and, most crucially, accessible counselling services.

“This has broadened and diversified the services offered by education consultancy firms as well,” says Aadarsh Khandelwal, chief executive officer and co-founder of e-learning and education consultation firm Collegify. Services now include not only traditional ones like admission guidance and visa assistance but also personalised counselling, pre-departure orientations, financial planning and accommodation assistance.

“Our services are evolving as a result of the evolving needs of the students. We are now staying in touch with them after they have reached their destinations, offering local networking opportunities, part-time job placement assistance and emotional support,” says Khandelwal. Families are also becoming more conscious about the job prospects of graduate students.

This has also caused students to return to consulting agencies for post-admission assistance. “These services encompass a wide spectrum, starting from pick-and-drop arrangements and hunting for suitable housing to advance booking of accommodation items, such as bedding kits and kitchen supplies. Moreover, we help with issue of international SIM cards to enable seamless communication,” says Sayantan Biswas, co-founder of Mumbai-based study-abroad platform UniScholars.

A Delhi University professor, who does not wish to be named and has helped close to 20 batches of students with their foreign university applications, points out that the diversity of services is a double-edged sword. “These have indeed helped many students and their families from smaller cities to furnish the right documents and context with the right resources both during the application process and at the post-admission stage. However, many agencies working in smaller towns often offer attractive freebies such as laptops or travel to education seminars, etc, while gradually piling on hidden costs down the line,” he says.

Ahana Ghosh (name changed on request), who recently returned after finishing masters in computer science at the University of Washington, tells Business Standard that the consultancy firm that had helped her with the applications offered her a separate package for access to “special” job placements and application consultations.

However, given the tough job market during and after the pandemic, the placements and consultation sessions were either “cancelled” or did not yield the desired result. “Nonetheless, while they had initially promised a negligible cost for the services, the bills became larger with the pandemic serving as a convenient reason,” explains Ghosh, who ended up spending close to Rs 80 lakh — most of it through the agency — over the course of her two-year degree programme.

“Given that there can be no clear guidelines or ground rules in such a situation, agencies find it easy to argue that it is the students who could not capitalise on the opportunities they were provided, or simply cry ‘pandemic’. With the current situation in the global job market, students are the ones who come back with an added burden of educational loans,” the DU professor adds.

New universities often offer high commission rates to consultation agencies for securing prospective students — around 15-25 per cent of a student’s annual tuition fee, Khandelwal says.

He points out that considering the lower levels of awareness in smaller towns about the application and post-application processes for foreign universities, the ecosystem at the more local levels runs on trust. And it can be tricky for families to negotiate the hidden costs that agencies might include in their packages. “Applying to foreign higher educational institutions is becoming increasingly risky, and students should be sure about exactly which service they absolutely need,” he observes.