The graph of Indian students going abroad to study is rising. According to the latest data from the Education Ministry, over 770,000 Indian students went abroad to study in 2022. This was a six-year high.
However, budgeting and financial security have become even more crucial as a result of the Indian rupee's declining trend against the US dollar and the inflation rate always heading north.
We spoke to some experts, looking for solutions. And came up with a guide on how to plan your budget for studying abroad.
Start with proper research
We all know that the first step is the most difficult one. So, as per experts, your first step towards pursuing your study abroad goals should be researching the field of interest and the ideal country to pursue the same. Once you are done with that go towards researching the cost of living.
Sayantan Biswas, Co-founder, UniCreds (Extended Arm of UniScholars) mentioned that researching the average cost of living in that country and factoring in various expenses to estimate the total cost of education is crucial for budgeting and securing necessary funds (including educational loans) for tuition fees and living expenses.
Scholarships and loans... and part-time jobs
Manuj Trehan, CFO, University Living, pointed out that someone who has finalised a destination for their higher education abroad must take into account that the cost of living differs from country to country and from city to city and plan accordingly.
“Consider different options for finance, including student loans, personal loans, savings accounts, and PF and these requirements will differ depending on the visa and immigration rules. Students should also keep a check on the exchange rates of their destination. Most universities offer scholarships, grants or financial aid to international students, so evaluate that as well,” he added.
Also, international students can work part-time which can help them manage their miscellaneous expenses.
Applying for an education loan is very simple. Students have to follow a simple KYC process followed by credit checks on the applicant and co-signer. A sanction letter is released based on the student's requirement that can be used for their visa applications (as proof of funds), said Rachit Juneja, COO, Fly Finance by Leverage.
Additionally, because of the rising demand for education around the world, picking the right education loan is essential. There is a demand in India for loan companies that are well aware of the problems experienced by parents, academic institutions, and students.
Do make sure to educate themselves and make use of self-service capabilities thanks to fintech solutions that are technology-enabled before opting for loans.
A student can apply for merit-based scholarships, university grants, and bursaries to lessen their financial load. Moreover, several academic institutions grant partial scholarships. Before or during the college application process, one might look for appropriate scholarships and combine them with an education loan.
As an alternative, because most nations allow overseas students to work part-time, students can go for these jobs for some financial cushion.
Parents, prepare early
According to Biswas, the most practical way for parents to insulate their children against currency fluctuation is by ensuring that their student loans, investment portfolios, and other financial preparations are in the currency of their destination. This allows the borrowing and the repayment of any dues to remain in the same currency, thus ‘sidestepping’ the problem of foreign exchange. Furthermore, it is recommended to select a fixed interest rate instead of a floating interest rate, to avoid future hikes.
With tuition fees increasing, Eela Dubey, Founder, EduFund says, a child’s higher education abroad should not be left to chance. Still, it appears that most Indian parents never have a financial plan in place.
For the aspirational Indian parent looking to send their child abroad, Dubey suggests, one should think long term, and early.
It’s vital to collect a good amount of corpus even to opt for a loan in the future. This means parents should have a savings plan in place as early as possible.
Further, creating an education fund is essential. This can be done by investing in long-term financial assets such as mutual funds and ETFs.
"Under the digital LRS scheme of RBI, Indians now have the flexibility to invest in multi-currency stocks and ETFs, which has the scope of helping them earn in dollars. For the Indian parent who is especially keen on sending their child abroad, investments in dollar products are a potential solution to combat depreciation pain points,” Dubey advises.
(Edited by : Shoma Bhattacharjee)
First Published: Mar 15, 2023 7:44 PM IST
