There is a lot of talk on the slipping Indian Rupee against the US Dollar and its impact on the students wanting to study overseas. The reality is that the Indian Rupee is slipping against all major currencies though the depreciation against the US Dollar and Canadian Dollar is far rapid.
Interestingly this is an opportunity for NZ to emerge as the most economical of the major destinations. A student opting to study in NZ is likely to be least affected as the increment over the one year period is only 14% as compared to US where the increase is 20% and likely to be more in coming months. Australia too has already had its rapid increase between 2010 and 2011 and the increase in the last one year is only about 15%.
Hence, it is easy to summarize that on the cost parameters, NZ followed by Australia are likely to the the preferred destinations. Canada matches US in terms of increasing dollar value and the Great Britain Pound is not far behind. UK has other factors too which is working against its attractiveness as a destination for Indian students.
VALUE OF INR AGAINST OTHER CURRENCIES 2010-2011-2012
| INR VALUE AGAINST | USD | AUD | NZD | CAD | GBP |
| 2010 May | 46 | 40 | 33 | 44 | 70 |
| 2011 May | 46 | 48 | 37 | 46 | 74 |
| 2012 May | 55 | 55 | 42 | 55 | 87 |
| INCREASE IN PERCENTAGE (May 2012 over May 2011) | 20% | 15% | 14% | 20% | 18% |
In these tough times, Indian banks too have not been of much help. The rate on education loans has been rising but more importantly the Indian banks have not really raised their upper limits for education loans in over a decade. Rs 20 lakhs used to be the maximum loan amount ten years ago and it continues to remain so. However the buying capacity of the Rs 20 lakhs has indeed gone down significantly. There is a need to urgently take lift the limit to Rs 30 or even 40 lakhs to be of real help to the students seeking overseas education. The salaries have increased in last decade and hence that increases the repayment capacity of the sponsors. Also the property values have increased too and it is possible to provide adequate collateral to the banks.
In an article in The Hindu of this week, the above is contended too… See link here.
I am quoted as saying…
“The US dollar has appreciated by 25 per cent in one year and this would mean that the education has become 25 per cent more expensive. Overall, there is 30 to 35 per cent increase in expense for an Indian parent in the last 12 months. What is worst is that the number of scholarships has come down too,”
Mr. Ravilochan says the maximum loan limit of Rs. 20 lakh was fixed by Indian banks a decade ago. There is a need to increase the maximum limit as the costs have become higher. In short term, this is the only solution that can be offered to the students and their parents.
Allow me to clarify that the reason why I say that the cost to an Indian student going to US has increased by 35% or more in last one year though the Rupee has depreciated by only about 25%(actually from the value that was in the beginning of 2011 compared to current value) is that most institutions too have increased their fees by about 5-10% in the last one year. In reality if we build the other cost increases and decreasing scholarships, the cost to the Indian student can even be higher.
Therefore, in summary, NZ and Australia are once again can be the ones to gain from the forex movements while Canada and US are the worst hit destinations. UK is affected in all ways this year and the forex changes too does not help.
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