In a country like India where a majority of students aim at studying in abroad were affected the most due to the falling rupee. The fall in rupee has raised the costs of foreign educations forcing the students to dig out some alternatives like part-time jobs or scholarships in order to meet their costs. The value of rupee has depreciated over 18 percent in the last year; rupee was at 44.72 in January 2011, and ended at a low of 53.07 at the year end.
Although Students feel that this New Year will bring along some merriment for the depreciating rupee. Nayan Upadhyaya, student who aims at taking up a Masters course in International Business said, "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," Upadhyay's course will cost him a total of 34.2 lakh and it commences in April 2012. Had it Upadhayay taken admission in 2011, he would have easily saved 5.38 lakh. The soaring cost of study is directly proportional to the percentage of rupee depreciation. Students abroad have to dig out wallets in order to study abroad due to the rising cost of U.S. dollars. The situation is that even though a student gets a loan sanctioned for 15 lakh, it would yield only $28,000, or else it would have yielded over $33,000. The pressure generates here, as the students now have to arrange finance to collect almost 20 percent more money.
Mohit Gundecha, CEO, YourNextLeap.com, a Pune-based online career and academic counselor, said, "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." Students in India can only get loans through Indian banks which ranges between 15-20 lakh. But the falling value of rupee has made the amount insufficient for MS aspirants. Students who are completely dependent on bank loans are working in India at the minimum salary jobs will be affected the most.
A Krishna Kumar, Managing Director (national banking group), State Bank of India, said that the affect of value depreciation in rupee will not be seen in this year but it will affect the next academic year. Banks will look into the cost economics in March-April this year. As Education loan growth slows, Prashant Bhonsle, Country head, Credila Financial Services, an HDFC venture, said, "Global uncertainty, which has probably played on the minds of risk managers at banks, could have led to slow growth in education loans. They may now perceive higher risks for students, as far as job potential is concerned."The data released by Reserve Bank of India states that the education loans grew only by 17 percent in October 2011, when compared to 24 percent in October 2010. As the business of educational loan is directly correlated to educational sector, it is evolving at a faster rate and makes the domain challenging for bank lenders. M Narendra, Chairman and Managing Director, Indian Overseas Bank, said, "With the rupee depreciating, foreign education would become more expensive, and this might reduce the off take of education loans further, as people may go for higher education in India."
