Trouble in planning finance for study US aspirants

Studying abroad has grown more expensive nowadays with the Indian rupee continually sinking against the US dollar. Students who have already been pursuing their education in the United States or wish to enrol in an American University face the problem of declining rupee value and record inflation in the United States.

Studying abroad has grown more expensive nowadays with the Indian rupee continually sinking against the US dollar. Students who have already been pursuing their education in the United States or wish to enrol in an American University face the problem of declining rupee value and record inflation in the United States.

The ambition of thousands of students to study in the United States has become a faraway one and for those who are already there, subsistence has become a major concern due to the rising prices of commodities and energy. As the Indian rupee continues to fall against the US dollar, parents who have been paying for their children’s international education out of their own pockets may face a larger outlay.

As of July 6, 2022, one USD equals 79.27 rupees and it is found that in just one year, the Indian rupee has dropped by about 6% against the US dollar from 73.12 in 2021. Thus, for every 1 lakh, the student must pay an additional INR of 6,575 or more to support US education.

There may be no increase in tuition but due to the currency fall, the cost of education will rise in rupee terms. The depreciation of rupees increases financial liabilities for international students and as the value of the rupee falls, the rupee amounts necessary to pay in dollars increase.

If the tuition fees for a course at a US University are USD 10,000 per year, students from India will have to pay INR 7 lakh if the rupee equivalent to the dollar is INR 70. However, if the rupee falls to INR 75 per USD, the same tuition charge in rupee terms will be INR 7.5 lakh. With the further fall of the rupee, the rise in the cost of education for an Indian student will considerably increase.

Thus, this amounts to higher schooling and living expenses along with a decrease in the value of the corpus set up for a study abroad by the applicants and their family members as loans are acquired to cover the initial necessities. Top-up loans and refinancing alternatives are great options but the repayment terms of such loans are not suitable for all as in order to acquire this loan, one may be asked to pledge collateral.

The annual inflation in higher education in the United States was 8% according to recent reports which is much exceeding annual retail inflation and highlight that college costs have been rising faster than overall inflation.

College tuition fees have increased year after year even after correcting inflation and the average tuition for a four-year degree program at a private non-profit university has increased to USD 37,600 in 2020-21 from USD 31,700 in 2010-11 according to the National Center for Education Statistics when both prices were held constant at the 2020-21 price level.

More magnific tuition fees must be paid along with dealing with annual inflation if you wish to study at an Ivy League college in the United States. The total cost of education at Harvard University for an undergraduate program has increased from USD 82,178 in 2021-2022 to USD 84,413 in 2022-2023.

The yearly student budget or cost of attendance at the Massachusetts Institute of Technology according to the Economic Times report has increased from USD 77,020 in 2021-2022 to USD 79,850 in 2022-2023.

The depreciation of the Indian Rupee along with the regular annual growth in the total cost of education in the United States, according to the report, has increased the total cost of education roughly by 10% for new students. This inflation means that every rupee that is owned by you has less purchasing power and is linked directly to the currency rate.

The current depreciation of the Indian rupee against the US dollar for Indian students already studying abroad allows for a management crisis. For those who hope to study abroad this year and beyond, the current status of the economy should help in the establishment of a corpus that includes travel expenses, cost of living, tuition fees as well as currency rate swings that need a revision of investment plan.

The situation is quite difficult under the current scenario but it is not impossible to study in the United States. Being a study abroad aspirant, you must find an alternative method to minimize your cost and expenditure by earning scholarships or fellowships.

You can also work on earning some extra income to make ends meet that will help you fuel your study abroad dream. The additional costs can be covered by upgrading or changing your investment plans. By carefully evaluating the economic situation and planning diligently, you can protect yourself from this economic fall or inflation.

Your study abroad expenses can be cut down greatly by earning scholarships and grants which will help in reducing your tuition fees. Students from diverse backgrounds can avail scholarships such as university scholarships, government-based scholarships, trusts and private organizations.

You can also select the right bank to access education loans to study abroad. While applying for an education loan, make a conscious choice to go with a floating interest rate even though most banks have made floating interest rates the default.

From the RBI’s rate modification, a variable-rate loan will be of benefit which is directly tied to inflation and other related factors. Another effective possibility is the foreign fund investment which provides currency-adjusted returns to offset the effects of rupee depreciation.

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