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Rupee slide hits foreign study plans

New Delhi, Aug. 22: Saloni Murari had begun applying to British universities in January. A few days ago, she suddenly dropped her plans to study overseas this year.

“With the rupee falling so fast, I’d have had to shell out much more. I have put my plans off till September next year; I hope the situation would have improved by then,” said the Delhi University graduate and MBA hopeful.

The rupee has lost about 13 per cent against the dollar since January, when Murari began working on her plans.

A one-year MBA course in a British university costs 12,000 to 17,000 in tuition fees while accommodation and other bills can come to between 6,000 and 10,000.

Saloni said Britain’s recent move to introduce a 3,000 cash bond for “high-risk” Indians (and some others) applying for six-month visit visas had worsened the problems for students.

“I might have had to spend Rs 20-25 lakh overall for the course, which is a huge amount. If the exchange rate does not improve, I shall look for a scholarship next year,” she said.

The rupee’s slide has “ruined” the overseas study plans of many young Indians, education counsellors say. If the trend continues, they claim, Indian students would be forced to change their destination countries — a theory several academics have dismissed as premature.

Naveen Chopra, founder chairperson of The Chopras, an education firm that councils students for foreign universities, said the students would prefer cheaper destinations if the rupee’s fall was not arrested.

“There may not be any significant change (in destinations) this year because the students would have already received admission offers from institutions of their choice. But from next year, they will prefer cheaper places like Germany, Singapore or Malaysia,” Chopra said.

Calcutta-based education counsellor Ravi Lochan Singh said it had been “a very difficult last few days” for Indian students just when American, British and Canadian universities were gearing for admissions.

“It’s time these institutions stepped in and helped out the (Indian) students who are about to reach their campuses,” Singh said.

He suggested that scholarships or India-specific grants amounting to 10 per cent of the tuition fees should be offered to bridge the widening gap between the planned and real costs.

Singh also cited the Reserve Bank’s move to lower the cap on annual overseas remittance by individuals from $2 lakh to $75,000.

“A sum of $75,000 is still quite adequate for a student on an average, but if this is reduced to $50,000 or lower, the situation will become serious,” he said.

Another hurdle, Singh said, is the Rs 20-lakh ceiling on loans for overseas education.

“The limit has not changed since 2001, when the rate was Rs 25 to Rs 30 to a dollar. In 2001, a sum of Rs 20 lakh could cover an Indian student’s full education costs in most countries. Now, it barely covers the first-year costs,” Singh said.

Academics, though, suggested the rupee’s depreciation was unlikely to have an immediate impact on students’ plans.

University of Nebraska president James B. Milliken said Indian students made up the second-largest foreign contingent at his institution.

“While we can’t predict exactly how fluctuations in the global market will impact the university’s international enrolment, India is and will continue to be one of our most important strategic partners,” Milliken said in an email.

Venkatesh Kumar, a professor at Mumbai’s Tata Institute of Social Sciences, said it was too early to predict any changes in Indian students’ outflow to foreign universities or their choice of destination.

Kumar and fellow social scientists at Penn State University and Rutgers University have researched mobility patterns among Indian students and professionals abroad.

The Asian sociological preference for foreign education and India’s lack of enough quality higher-education institutions are key reasons experts cite to suggest that many students and their parents may remain willing to fork out the extra dollars to go to college abroad.

The brightest Indian scholars, who could study in the country’s best institutions if they wanted, would likely also receive scholarships from top US and European universities, Kumar said. And the affluent can afford the extra rupees.

Rajya Sabha members today expressed concern about the students’ plight.

“Many students are pursuing their education in the US and other countries. They are facing a financial crisis. The Prime Minister should clarify what steps are being taken to ensure the rupee remains stable,” Samajwadi member Ram Gopal Yadav said during Zero Hour.

BJP leader Basawaraj Patil said the falling rupee was creating problems for one lakh Indian students abroad.

Indian students now spend about $5.5 billion (Rs 35,648 crore by the current exchange rate) a year on overseas education, the Union human resource development ministry estimates.

A slight revival in the US economy, coupled with the apparent crisis in India’s, may weaken another recent trend — Indian students’ and professionals’ willingness to return home after studying or working abroad.