If they prefer domestic institutes to foreign universities, their annual savings could touch that amount. Academic fees, insurance and travel expenses, which set them back by a good amount now, can be saved.
The National Education Policy (NEP) 2020 that was approved by the Union Cabinet aims to make India an attractive higher education destination.
The government not only wants Indian students to choose an education institute within the country but also to make Indian institutes world-class institutions.
Almost Rs 50,000 crore flows out of India every year for higher education programmes. Through NEP 2020, the education ministry wants Indian education institutes to become multi-disciplinary, and have exchange programmes with foreign institutes, so that these candidates get exposure to overseas education at affordable rates.
Speaking at an education conclave by UGC, Prime Minister Narendra Modi said that NEP 2020 will enable students to stay back in India and pursue higher education by offering world-class facilities in Indian institutes.
The ultimate aim is not just in reducing the brain-drain but to also reduce the financial strain on students and families. But how much will a student actually save?
Moneycontrol brings you insights on what is the potential saving for a student annually if he/she decides to stay back in India to pursue higher education:
The first step to an international institute is the application fee. The average fee is $50 (Rs 3,750). This fee is non-refundable even if a candidate fails to secure admission.
In comparison, the average fee for applying for an education programme in India ranges between Rs 500 and Rs 1,500. So, in the application fee itself, a student saves Rs 2,250.
Student insurance charges
Whether you study in Australia, Europe or the United States, it is mandatory for students to have an insurance policy.
The average yearly premium in the host country would cost at least Rs 30,000. The maximum annual premium in places like the US could go up to Rs 1 lakh.
In case a student pursues his/her education in India, this Rs 30,000 per annum can be saved as they don’t have to take health insurance while studying in Indian institutes.
Once you secure admission into an international institute, the next step is to apply for a student visa. The visa charge ranges from Rs 10,000-34,000, depending on the country of origin. Depending on the type of programme, a student would have to pay an annual fee for getting the visa renewed. This renewal is done on payment of an additional charge.
If a student stays back in India, there is a direct saving of at least Rs 10,000, since there is no visa requirement.
Also, a student has to show sufficient funds in his/her bank account to get the visa approved. Apart from covering tuition fees, the host country would verify if these funds are adequate to meet the living expenses for the period.
In the UK, for instance, a student needs to present proof that he/she has about Rs 1 lakh per month as funds for living expenses in London. The first-year fees for the course should also reflect in your bank account financial statements as funds. Without meeting these requirements, your student visa will be rejected, and the candidate would be required to apply again.
Tuition fees for academics
The annual tuition fee is the largest expense for those studying abroad. Depending on the duration of the programme and the country chosen, the cost of education would typically be at least Rs 15 lakh per year.
If a student chooses specialised programmes like, for instance, an MBA at Harvard Business School, the cost would jump to Rs 54 lakh per year. If an Indian student is considering an MBA at the Wharton School at the University of Pennsylvania, the estimated cost for one year will be Rs 85.4 lakh.
Without a scholarship, education or financial grant, it is impossible to seek admission into Ivy League institutes. Taking an education loan for studying abroad means that a student would end up paying at least Rs 5 lakh more than the actual loan amount in interest payments if the loan is Rs 20 lakh or above.
In comparison, a higher education programme in India would cost between Rs 3-5 lakh on an average. Specialised programmes like an MBA from an Indian Institute of Management (IIM) would cost between Rs 15 lakh-Rs 20 lakh per annum.
Studying abroad can be expensive because living expenses in developed markets like Europe and the United States are significantly higher than in India.
A student choosing a hostel accommodation in India would incur Rs 1 lakh as annual living expenses. But if he/she chooses to study abroad, the average expenses would range between Rs 7 lakh- Rs 10 lakh, depending on the country of education.
There is a direct saving of about Rs 6.5 lakh per annum if a student decides to stay back in India.
This is an often-neglected aspect. The actual travel expense would depend on the flight charges to the destination and how far the educational institutes are from the airport. Travel expenses for study at an international institute would cost Rs 2 lakh per year for an Indian student.
About Rs 1.5 lakh-1.8 lakh can be saved per annum for a student who chooses to study in India. This is because inter-city travel by flight would only cost between Rs 5,000 and Rs 10,000 one-way, depending on when the ticket was booked.
Total savings: Rs 18.7 lakh
Considering that a student does not have any scholarship to pursue higher education abroad, the annual expenses of Rs 25 lakh would be incurred on an average.
In comparison, the same student would save Rs 18.7 lakh in case he/she decides to choose a higher education programme in India. Tightening visa restrictions for international candidates in the US and Europe has also made it tough to seek immediate employment in the country, thereby increasing the return-on-investment period.Amidst the coronavirus pandemic and rising financial uncertainty due to job losses and pay cuts, the cost savings for staying back in India is massive.