Cross-Border Education

India is going global with a vengeance. One manifestation of this is the sheer number of youngsters going abroad for a “foreign” degree. In 2016, this number is expected to cross 400,000. The US, predictably, leads the list of destinations. According to the Open Doors Report on International Education Exchange, there was a 20.4 per cent jump in Indian students going to the US for higher education in 2015 compared to the previous year. Other favoured destinations are the UK, Canada, Australia and New Zealand. Apart from familiarity with English, there are two reasons why these countries have emerged as hotspots for Indian students. First, there is tremendous competition for the limited seats available in world-class Indian colleges. And second, there is a belief that higher studies abroad prepares one better for a global career.

Not surprisingly, this has emerged as a multibillion dollar market with foreign universities and colleges using modern marketing tools, including sales agents, to attract students. For students and parents, the challenge is to make the right decisions in an informed manner. So where can one begin when considering an overseas degree?

Applying
Start early, start with counselling: The first step is to zero in on the right kind of professional counselling and mentors. This is particularly important for students planning to go abroad for undergraduate studies. Charushilla Narula, education consultant and founder, University Connection, suggests, “Students need to start preparing around the ninth standard. The average cost of a basic counselling session could be around Rs 5,000, while an all-inclusive package could be Rs 75,000 to Rs 1.5 lakh. Treat it as the first cost-head in considering study abroad.”

Both students and parents must be prepared to spend time and effort conducting serious planning and research of their own, even before they select a professional counsellor, so they can ask the right questions. Harjiv Singh, founder and CEO of Salwan Media Ventures, has important advice: “Research, research and research. Remember, luck favours the prepared mind.”

Parents must identify a mentor and have their child undergo a counselling session that could include education counselling, aptitude analysis, help to identify courses suited to the child, college research, application process, deciding on the best option if all colleges admit the student, visa formalities, pre-orientation workshops, and then planning for departure. The process can take up to 10 months. The pitfall to avoid here is “agents” masquerading as mentors. Narula of University Connection says, “Unfortunately, the international education market in India is vitiated with agents, and the agents are attached to certain colleges and universities. That is unethical.” The lesson: pay good money, but pay it to a professional without a vested interest.

Study what, and where? Before taking a final decision, students and parents must have complete clarity on the course, the college or university, and the country. That has to be mapped to career prospects. Rajiv Jamkhedkar, founder and MD of Serengeti Ventures, says: “For undergraduate degrees, a broad area is better than being too specialised.” Thereafter, consider the country to move to. Gaurav Roy, head - Products, BigDecisions.com, says: “Family considerations, social and cultural fit, language and cost may be few factors.”

After the course is over, not all countries allow foreign students to work. This is important for those not considering returning to India for their first job. “Post-study work is an embargo in the UK, although it’s being discussed for relaxation. In the US and Australia, after study, there is no embargo, and one may work there,” says Narula of University Connection. Students and parents need to factor this into their budget.

To zero in on the university, Jamkhedkar says, one should have at least 10 options. “Consider the factors such as budget, reputation of college or course, faculty and job placement record,” he says. Choosing the right college or university is equally important when it comes to career. Roy adds: “Universities have brand value which has a significant impact in the employment market.”

The application process: Having short-listed target institutions, one needs to systematically go through the application process, which differs from country to country. Like, for the UK, the process involves one common application for five colleges, one letter of recommendation and one personal letter accompanied with a fee of £21. In the US, each college requires a separate application with three recommendation letters, a detailed statement of purpose and separate academic sheets. The application fees could be the third expense head, after meeting exam costs. Many students apply to around seven to 10 colleges. “The fees ranges from $60-100 per application per university, while for post-graduation, range could be $60-120 each,” says Narula of University Connection.

Exam costs: The SAT is mandatory in countries such as the US and Singapore, and costs around Rs 30,000. Singh of Salwan Media says, “English-language tests like TOEFL and IELTS typically cost around Rs 10,000 to Rs 12,000. Other graduate tests like the GRE and GMAT cost anywhere between Rs 13,000 and Rs 17,000. But examination costs vary depending on which country you want to study in. Then, there are also late fees, rescheduling fees and cancelling fees to consider.”

Zafeena Suresh, senior adviser at the US India Educational Foundation (USIEF), adds: “Other additional costs in this category include retaking the tests, sending test scores to universities the student is applying to, and the application fee, which ranges from $50-250. Students will also need to pay the SEVIS fee and the visa fee for study in the US. The whole application process can alone cost between Rs 1-2 lakh.”

Funding
Parents must set aside enough money to finance all costs, including fees, living expenses, and emergencies, for a period of up to four years. Getting a scholarship would be a bonus, but don’t bank on it. Zafeena of USIEF says, “An undergraduate student (for the US) can expect to pay $30,000-70,000 annually. If you plan to enrol for a master’s programme, tuition and living costs could range between $35,000-50,000 annually. For a doctoral programme, we encourage students to accept admission where the financial aid offer is clear from year one of study. Doctoral students are provided funding in the form of fellowships, or research and teaching assistantships, along with tuition waivers.” The choice of course, country and university should be based on available funds. “Typically a lot of people select first, and then try and find funds for education. This is a wrong decision and could lead to financial stress,” says Jamkhedkar.

Scholarship: How do you go about getting that prized scholarship? Zafeena of USIEF says, “The university is the best source for financial aid, and students should be prudent in their university selection. Doing research on financial aid offers to international students is crucial, as financial aid in any form helps reduce costs.”

Singh of Salwan Media suggests, “Instead of relying on the big $20,000-50,000 scholarships, which are few and far between, look out for small scholarships. There are a lot of $500-2,000 scholarships at various levels that can considerably ease financial burden.” And as far as courses are concerned, according to Narula of University Connection, “The US is open for undergraduate scholarships, while the UK is open to postgraduate scholarships.”

Forex: In 2011, a dollar was about Rs 45. Today, it is Rs 66 — a 45 per cent depreciation! If the rupee depreciates further, your cost could shoot up substantially in Indian currency terms. Singh of Salwan Media cautions, “If you are pursuing a four-year undergraduate course, your education cost will almost certainly be impacted by depreciation, so you will need more currency. Don’t just look at one-year or admission costs, but also macroeconomic trends.” If you have funds in place, consider opening a bank account abroad in your child’s name, and transfer a portion of the funds at the current exchange rate to hedge the fluctuation risk.

Study and work: After joining university, you can look for work that you are eligible for. Jamkhedkar says: “From the second year, working as a teaching assistant during the semester or interning during breaks is a good option to offset expenses.”

Zafeena of USIEF adds: “In the US, international students can work only 20 hours a week on campus on an F1 visa. Hourly wages range from $8-15. On completion of the course, a student may avail of Optional Practical Training (OPT), which allows students to work up to 12 months in an area directly related to their area of study. OPT can be extended up to 17 months for fields related to science, technology, engineering and mathematics.

Cost and Trade-off
International education doesn’t come cheap. There is some irony in the fact total foreign direct investment from the US in fiscal 2015 was $1.8 billion, while Indians spent $3.6 billion in the US for their children’s education.

A four-year engineering course in the US costs around Rs 30 lakh a year, adding up to Rs 1.2 crore for the entire degree. One needs to calculate the return on investment by considering prevailing pay packages, and see how soon the break-even will be reached. Keep in mind that Euro-pean economies aren’t exactly booming. Management students’ chances may be bleak, but other professionals, such as engineers and doctors, could still be in demand.

Talk with friends and colleagues so that you can avoid the financial mistakes of others, and learn their money-saving tricks. The process of planning to study abroad may seem tedious, but it could change your entire future. So before you get on that plane, invest time in strategic planning. That itself is an important life lesson.

sunil@businessworld.in; @dhawansunil

(This story was published in BW | Businessworld Issue Dated 14-12-2015)