Impact of COVID on Cost of Studying Abroad
COVID has increased the cost of studying abroad and impacted the world economy significantly. The increase in the rate of education inflation has thrown budgets off the chart. Caused unprecedented disruption and major changes in the education system.
Although COVID increased the cost of studying abroad, it did not diminish the demand. Student-friendly policies and universities welcoming international students back to campus encouraged this demand.
Let’s look at how the pandemic and other economic changes increased the cost of studying abroad and how you can manage it.
Exchange rate and annual cost hit for Indian students
According to a survey conducted by the Indian Government, the education inflation in India rose to 4.12% after the COVID pandemic. In countries like the USA or the UK, inflation rose to 10%, touching an all-time high. This has directly impacted the fee structures as well as the cost of living in these countries.
The pandemic led to a steep depreciation of Indian Rupees against the US Dollar. According to the government data, $1 had the value of Rs. 73.12 as of June 12, 2021.
As of 2022, there is a 6.16% decline in the Indian Rupee compared to the US Dollar. Hence, if you had to pay 1 lakh until the previous year, you will have to add Rs. 6,575 to your amount this year.
When it comes to tuition fees, in particular, the annual inflation in higher education in the USA is 8% which exceeds the annual retail inflation.
The National Centre for Education Statistics conducted a survey in which they found out that the average fee for a 4-year degree program in the USA was around Rs. 25,22,000 in 2010-2011 which rose to Rs. 29,91,000 in the year 2020-21.
If you consider the example of Harvard University, you will get to know that the total cost of education for an undergraduate program for one academic year has increased from Rs. 65,38,000 in 2021-22 to Rs. 68,15,000 in 2022-23.
Additional read: Cost of school education in India
Negative financial impact and intention of studying abroad
Before the era of the pandemic, the cost of higher education abroad was often more than justified based on substantial long-term economic return on that investment.
Tertiary education is considered to have a significant impact on the starting salaries of graduates and lifetime earnings. Getting an education abroad has a transformative experience for the students.
Also, the experience and income gained further extended if the students seek temporary or permanent migration to the country.
Despite the existence of COVID, 91% of Indian students still choose to study abroad. This survey was conducted by UNSECO during the year 2021.
Out of this 91% of students, 71% of them want to move abroad because of better healthcare facilities. The Ministry of External Affairs sent out a report which states that 261,406 Indian students were admitted to a university abroad in the pandemic year 2020.
More motivation was seen in the students so that they can improve the circumstances that they have been living in.
No exchange rate shock for education in the UK or Canada
There has been huge volatility in the exchange rates of the Indian Rupee to the British Pound and Canadian Dollar in the last year. But if you compare the volatility on a year-to-year basis, you will not find a significant difference in it.
Hence, we can say that the students studying in these countries did not have to face major exchange rate movements and a hike in the tuition fees of the universities.
To counter future exchange rates and sponsor your child’s foreign education, you can invest in global equities, and US stocks and diversify your investments.
While COVID increased the cost of studying abroad, it also revealed how underprepared Indian families are to deal with financial and health crises.
Break the cycle, don’t rely on education loans to sponsor dreams. Save for them and invest in tools you trust to create wealth!