The impact of the falling currency is felt on the economy in all sectors, and this decline is most unfavorable for Indian students who are headed to foreign universities for their higher education or are planning for the same. When the price of the rupee falls, students who are already studying in foreign destinations such as the USA, Australia, or Canada or those who plan to go there have to pay more to fund their education. Hence, the amount that needs to be paid in the dollar increases, because of which the funding requirement also increases. This has resulted in Indian students thinking twice before heading abroad for foreign studies. One of the primary concerns of most students planning for foreign education is how it will affect their finances and what steps they can take to hedge.
The Impact of Falling Currency on Education Loans
For students studying in countries like the USA, the the Impact of Falling Currency on Education Loans also has a direct impact on their finances. Not just the cost of living increases for students studying overseas but the tuition fee also increases for both students who are already studying there and students who are planning to go there for further education. Consequently, students who are dependent on education loans for abroad studies will have to borrow more and then repay more too.
Though the effect of the depreciation of the rupee depends more on the destination country for their foreign education, students going to countries like the USA, Canada, and Australia will certainly have to bear the impact of this decline. Also, since the education loan for abroad is mostly in the Indian rupee and students have to pay their tuition fee and other expenses in foreign currency, the total cost of education abroad would certainly increase. The Impact of Falling Currency on Education Loans can also result in increase in all the expenses including the tuition fees, application fees for the universities, exam fees, and living expenses of the students.
Indian students can also look at other countries such as Austria, Germany, Belgium, Norway, Germany, Ukraine, and New Zealand that offer quality education at affordable costs.
Students who would opt for non-traditional study destinations such as the above-mentioned countries should consider the factors such as quality of education in the country, global reputation of that particular University, immigration-friendly policies of the destination country for graduate students, and overall economy of the country.
Ways to Hedge
The Impact of Falling currency is making students concerned who are already studying in a foreign destination or planning to enroll. However, if we analyze the situation in-depth, we might understand that this fall in the Indian rupee should not impede your foreign education dream. With meticulous planning and execution, students should be able to hedge this fall. Let us take a look at how students can lessen the effects of the falling rupee and how to manage extra expenses.
Look for ways to earn in dollars from your rupee investment
Students can hedge the effects of this downfall in the rupee if they try to earn in USD from their INR investments. For this, students can invest in international funds, such as Nasdaq 100 ETF, Franklin US Opportunities Fund, etc that are available in India are a good option to hedge from the falling rupee. All of these will protect students against the falling currency.
Work in foreign soil for a decade
If an education loan is taken in INR then you can also plan to work in the US for the coming years. If you will earn in USD and repay the loans in INR, the total amount that would be repaid in USD would be less than the amount borrowed.
Personal savings
Dipping into personal savings is another way to hedge from this downfall of the rupee. Rather than taking up more education loans, which would mean more interest, students can use funds from their savings to fund the extra expense caused by the fall in the rupee.
Top-up loans
Another method is to opt for a top-up loan from the same financial institution. Most banks and NBFCs provide top-up loans on existing loans and students can make use of these schemes. If your bank does not offer such a facility, you can then approach other financial institutions for a top-up loan. Refinancing a loan means paying off the old education loan with a new education loan that offers better terms and conditions. Students can get loans refinanced from leading banks and NBFCs.
Scholarships
Scholarships are another excellent way to meet increased expenses. Students who have good academic history have a higher chance of getting scholarships. However, other students should also try for various other scholarships.
Choose suitable education loans
This advice should be noted by students who are looking for the best bank for education loans. You can choose a bank that increases the loan amount with an increase in fees. In these cases, NBFCs are usually preferred.
Look for part-time jobs
Most countries allow international students to work for a fixed number of hours according to their Visa guidelines. Students can make the most of this opportunity and opt for on-campus or off-campus part-time jobs to earn a few extra bucks and take care of a part of their living expenses.
Transfer money to a student’s bank account
Rather than waiting for the due date of fee payment, parents can choose to transfer the fee money in installments to their child’s bank account whenever there is a temporary dip in the US currency. This way, you will not have to face the rate of exchange which might be lower at the time of fee payment.
Though the Impact of Falling Currency on Education Loans is not good for students headed for a foreign destination, in particular. Students don’t need to drop their plans of foreign education in fear of the falling currency. Careful planning and execution, choosing the right destination country, and a modest lifestyle among other things will certainly help you to live your dream of foreign education.
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