What will be the impact of demonetization of Indian currency on Indian students planning to study abroad in 2017? Here is an excerpt of the article published in Forbes by Rahul Choudaha and Di Hu.
On November 8, the Prime Minster of Indian announced a demonetization policy which made 86% of the currency in circulation invalid as a legal tender. With the application deadlines for most institutions ranging from November to February, the timing of demonetization could not have been worse as many were still making sense of the implications of the recent Presidential elections.
Student visa processes require showing proof of availability of funds for the first year of tuition and living expenses. Given that total annual expenses can range from US$ 30,000 to US$ 70,000, many Indian students were using short-term borrowing for visa approvals and education abroad.
Clearly, in this context demonetization is likely to affect the willingness and ability of Indian students to study abroad, however, the impact will differ by the level of education.
Traditional segment of master’s students: Seeking career advancement
Nearly 80% of all Indian students in the U.S. enroll at the master’s level. This is the traditional segment of Indian students who seek to minimize the cost of education and maximize the potential for job and career advancement opportunities.
Most of the Indian masters’ students fund their education through loans. Demonetization is going to make it tougher arranging for short-term funds. This in turn can result in visa denials and hence, lesser number of students finally showing up on the campuses.
Emerging segment of undergraduate students: Seeking global experiences
Only 10% of all Indian students abroad are enrolled at bachelors’ degree level. A previous analysis projected the trend of the growth of Indian undergraduate students. The emergence of Indian undergraduate students can be traced back to the changes in the economy have transformed the structure of society.
Children of professionals working in new-age industries like IT, financial services and telecommunications who started their career in 1990’s are now college ready. Given that these children come from families with substantial financial resources, their ability to fund their education abroad would not be affected by the demonetization.
While the full impact of demonetization is yet to be seen, many Indian students would find it challenging to arrange for finances and visas. It is especially going to affect enrollments for 2017 at the masters’ level. Institutions making proactive efforts in understanding the diversity and complexity of the Indian student market will gain in maximizing from these shifting trends.