To tide over fund crunch, students are either looking at alternative sources of funding like scholarships or picking up part-time jobs.
Nayan Upadhyay of Mumbai is hoping the new year will bring some cheer for the depreciating rupee. Upadhyay, who wishes to pursue a Masters course in International Business, is suddenly feeling the heat. ?The way rupee is behaving, I am wondering if I will have to shelve my study plans and take up a job. The depreciation has already pushed my course fee up by 18 per cent. This is in addition to the living expenses," he says.
Upadhyay's course for 21 months begins in April 2012. He will have to shell out a total of Rs 34.2 lakh for the course ? Rs 23 lakh for tuition fee and Rs 11.14 lakh towards living expenses. Had Upadhyay sought admission in 2011, he would have saved over Rs 5.38 lakh.
In the past one year, rupee has depreciated over 18 per cent. In January 2011, rupee was at 44.72. It ended the year at a low of 53.07.
The increase in study cost is directly proportional to the percentage of rupee depreciation. Also, rising cost of buying US dollars (plus a 2 per cent bank rate on the rise), increases the cost Indian students have to shell out for studying abroad. This means that even if the bank sanctions, say about Rs 15 lakh loan now, it would yield only about $28,000, which otherwise would have yielded over $33,000. Thus, the students have to look for additional sources of finance to gather almost 20 per cent more money.
?There are many deserving and worthy candidates from humble background who apply for higher studies abroad. For them, arranging the funds is not an easy task despite their strong academic records and the availability of over 50 scholarships. The weak rupee has resulted in higher cost of financing, and some families have indeed seen their savings fall short and their dreams of a better future shattered,? said Mohit Gundecha, CEO, YourNextLeap.com, a Pune-based online career and academic counsellor.
Indian Banks generally put a cap on providing education loans for higher studies abroad, and this ranges between Rs 15 and 20 lakh. Owing to the current rupee downfall, this disbursed amount would be insufficient for MS aspirants.
To tide over this fund crunch, say overseas education consultants, students are either looking at alternative sources of funding like scholarships or picking on campus part-time jobs, etc. For many who are not able to arrange for either, waiting for the rupee to cool off is the only option.
Vinayak Kamat of Gee Bee World, a Mumbai-based overseas education consultancy, says students who are solely relying on bank loan and then working back in India on starting level salaried jobs will be worst affected.
A Krishna Kumar, managing director (national banking group), State Bank of India, says the impact of depreciation in rupee value will not be seen in the current year but it will do so in the next academic year. Banks will work out cost economics in March-April this year.