Education abroad: How students, parents can finance education when rupee at its low, expert says this

As the rupee is trading at its all-time low, Indian students studying abroad are facing financial issues, especially those studying in the US. Students possibly have to apply for the extra loan to ensure they are comfortable, expert noted. 

Around 2.5 lakh Indians flew abroad for studies, according to the government’s data as of June-end 2022. The number of students going abroad for higher studies has been rising each year, to the tune of 7-8 lakh Indians. 

To help and avert students facing financial challenges, here is what experts suggest: 

A well-planned budget will help students survive abroad with the rising expenses and the rupee devaluation said Ankit Mehra, CEO, and co-founder of GyanDhan. He added, they are advised to make a weekly/monthly budget and stick to it.  

The co-founder of GyanDhan also advised students studying abroad to curtail unnecessary expenses, especially if they are being funded by an education loan.   

The student should use the discount cards and digital copies of the books required in the course, Mehra said. “Those who graduated and are working can refinance their education loans with lower interest rates. Moreover, they can budget their expenses and evaluate options to pay off the loan.”   

According to Mehra, “Students looking for an education loan to study abroad need to weigh their loan options carefully to choose a cost-effective loan product and capitalize on government provisions such as tax deductions and schemes that offer interest subsidies during the study period.” 

Stating that there are multiple lenders in the market, Mehra stated, “The best practice is to compare the loan products and the total cost of the loan to find the optimum source of funding. The total cost of education depends on various loan features - processing fees, penalty charges, loan tenure, holiday period, and interest rates.” 

Students can opt for longer repayment periods which will reduce EMI (Equated Monthly Installment). Students also have the option to refinance the education loan with an even lower rate of interest once they have graduated and have a job.  

Parents and students are advised to use education loans for most of their study expenses. They can keep personal funds as a buffer amount for emergencies, like inflation and rupee devaluation. 

Mehra also said that university scholarships are another credible source of financial support that most students remember at the last moment. Students won’t miss out on most of the scholarships if they keep up-to-date about scholarship applications along with the admission process.