The foreign education landscape has changed over the years. The costs are higher, the demand for foreign degrees has multiplied, and the need for financial budgeting and transparency over expenses has become essential.
What are some difficulties Indian students are currently facing abroad (in terms of job security, cost of living, residency etc)? Which countries are witnessing the most upheaval?
Indian students abroad are encountering challenges, particularly concerning the cost of living across various countries. Analyzing data reveals distinct trends and difficulties faced by Indian expatriates and students in terms of job security, cost of living, and overall residency conditions.
For the third consecutive year, the United States reported a big increase in the number of Indian students opting for higher education in the country.
The Open Doors Report (ODR) revealed a 35% surge in the influx of international students from India to the United States, resulting in an all-time high enrolment of 2,68,923 students in the academic year 2022-23. Indian students now constitute over 25% of the one million-plus foreign students enrolled in US institutions.
India surpassed China as the leading source of international graduate students in the United States for the first time since 2009/10. The number of Indian graduate students has surged by an impressive 63%, reaching 165,936 students—an increase of nearly 64,000 students compared to the previous year. Additionally, the count of Indian undergraduate students has risen by 16%.
However, in recent times, some social media posts from Indians based in the US are seen discouraging people from going there. Some of the key reasons for their concern are – slowdown in job market (the unemployment rate remains near historic lows, but the number of jobless in America has been rising steadily over the past year — and is now close to triggering a classic recession indicator.
The three-month moving average of the unemployment rate has risen 30 basis points above its 12-month low. That’s 20 basis points away from triggering the Sahm rule, a highly accurate indicator that the economy is in the early stages of a recession). Steep rise in tuition fees and living cost, low wages and H1-B lottery uncertainties add to the increase in cost of living for the average Indian student.
In recent times, Australia has been struggling with a very high cost of living. Employee households recording one of the largest quarterly rises in living costs of all household types with a 1.1 per cent increase to 6.9% in the December 2023 quarter. Reports have indicated that wages are not keeping pace with inflation amidst rising costs for energy, housing, and groceries.
In the UK, as of December 2023, a survey found the average student’s monthly living costs have increased by 17% since 2022 to £1,078. In a 2023 UK survey, it was found that 25% of students regularly skip meals as they could not afford them, and another survey indicated that 18% of students utilized a food bank in the previous academic year.
Among the countries analysed, the UK and Australia stand out for witnessing more challenges in terms of cost of living and job security. Both nations have experienced rapid inflation and economic fluctuations, making them particularly challenging for Indian students to navigate. The job market itself is undergoing rapid changes.
Today’s employers prioritize candidates who not only possess academic credentials but have also invested time in developing specific skill sets. This shift reflects a growing emphasis on practical and applied knowledge, often relegating those without such expertise to the sidelines.
Consequently, many students find themselves caught unprepared, facing job insecurity as their qualifications do not align perfectly with employer expectations. In response to these dynamics, financial planning emerges as a crucial strategy. It is essential for students and their parents to adopt a realistic approach to managing educational expenses and living costs. By planning ahead and allocating resources judiciously, they can mitigate the impact of economic fluctuations and maintain a focus on academic and career goals without feeling overwhelmed.
This surge in expenses extends beyond tuition fees to encompass accommodation, daily essentials, and healthcare, making financial management a critical skill for both students and their families.
Is it trickier for Indian students/workers to find a job and settle down overseas than it was 10 years ago?
It can be considered trickier for Indian students and workers to find a job and settle down overseas compared to 10 years ago, primarily due to several evolving factors:
Increased Competition
Over the past decade, there has been a notable increase in the number of Indian students and workers seeking opportunities abroad. This influx has intensified competition for jobs, especially in popular destination countries like the US, Canada, UK, and Australia.
Changing Immigration Policies
Many countries have adjusted their immigration policies over the years, often imposing stricter regulations and quotas for foreign workers. This can make it more challenging for Indian individuals to secure work permits or residency visas, affecting their ability to settle down long-term.
Economic Uncertainties
Global economic fluctuations (including the pandemic) have influenced job markets worldwide. These uncertainties are impacting hiring trends and long-term immigration aspirations of many students.
Cost of Living
The cost of living in many popular expatriate destinations has risen significantly over the past decade. For places like Canada, there is a housing crisis going on which has resulted in abnormal rent for foreign nationals (including students). As of 2022, about 30-35% Indian students who went abroad end up returning to the country, especially from European countries (As reported in ET). In Canada, specifically, the housing crisis, coupled with lack of jobs and inflation, is making the lives of Indian students more challenging than 10 years ago. In 2023, Canada was on track to welcome 500,000 permanent residents on top of a staggering 900,000 international students.
One of the key reasons for the Canadian government to bring in immigrants is to drive economic growth and resiliency. However, this has come at a time when Canada is witnessing a housing crisis. There is low construction of houses and the record-high interest rates have made new housing units beyond the reach of common Canadians and new immigrants.
There is a shortfall of at least 3,45,000 housing units across Canada, according to government data. House rents have skyrocketed too, making it challenging for students. In 2022, 2.26 lakh students out of 5.5 lakh international students, or 40 per cent of the total, were from India, according to Canadian government data. And there were 3.2 lakh Indians staying in Canada on student visas. Incorporating the latest shifts, the job market has undergone significant transformation, particularly with the integration of Artificial Intelligence (AI).
Employers are increasingly seeking individuals who possess logical and analytical skills that can be leveraged alongside AI technologies to enhance productivity. This shift makes finding a job trickier but also presents substantial opportunities for those who have adapted to these demands. The fact that the number of students opting for higher education abroad is increasing year on year indicates a growing awareness and preparedness among students to meet these new challenges head-on, equipping them with the skills necessary for success in this new job market era.
Are students pursuing courses in mid-low tier colleges/varsities particularly at risk?
There is some research that has revealed that a student with a good degree from a less prestigious university is better placed than a lower-class degree from a selective institution. The report by the Institute for Fiscal Studies found that graduates in England with first-class or upper second class (2.1) honours degrees had higher average earnings by the age of 30 than those who finished with lower second-class (2.2) awards, regardless of institution – meaning that degree class was often more important than institutional reputation.
In 2024, the risk for students in mid-low tier colleges hinges less on the institution’s prestige and more on their ability to develop and showcase relevant skills. While the focus has shifted towards recognizing skills over the university’s ranking, students at these institutions might face higher financial burdens.
This is due to potentially higher interest rates on loans and fewer scholarship/financial aid opportunities compared to top-tier universities. Nonetheless, students who can effectively communicate their skills and align them with employer needs can excel, regardless of their school’s standing. The key is to balance acquiring these competencies with managing the economic implications of their educational choices.
What advice would you give to Indian parents dreaming of a life abroad for their ward?
Students aspiring to study abroad spend years in building the best possible profile to get to the best possible university. It is the parents’ responsibility to spend those years along with their child to build responsibly build a financial corpus to support their child’s dream.
There is a rather simple way to accomplish this for any parent. For parents, dreaming of sending their children abroad it is imperative that they financially plan for their children’s life abroad early. A parent dreaming of a life abroad for their child’s life abroad should try to follow the three mantras –
1. Currency depreciation must be planned for. INR against USD was at Rs 40-Rs45 for every Dollar in 1998- 2000 vs Rs 83 now. This is a hidden inflation of 3-4% per year if you are spending in dollars and earning in rupees. It is imperative for any parent to plan to keep this in mind.
2. Education financing combines three items. The capital stack looks like investments, loans, and scholarships.
3. Start to plan early because as time passes by you do not want to be in a position where you cannot afford the cost.
Education abroad is expensive. Of the three financing options, only investments come with the compounding effect which is the 8th wonder and works only if you plan ahead.
