Rs 1,700 crore lost: The hidden costs of studying abroad borne by Indian students’ families

For students already navigating the high cost of studying abroad, smarter remittance planning can make a meaningful difference.

Pursuing education abroad is a dream for many Indians, but the financial burden extends far beyond tuition fees. Hidden costs in international transactions, such as exchange rate markups, transaction fees and ATM surcharges, can significantly inflate expenses. Let’s discuss how students and parents often overpay without realising it.

The not-so-overt costs of overseas education payments

Covering the tuition fee is just the upfront part of paying for foreign education. As Gagan Malhotra, chief operating officer at BookMyForex, explains, “From application fees to living expenses, every international transaction comes with hidden costs that most students and parents overlook.” These costs stem from multiple sources, often catching families unaware.

One major culprit is exchange rate markups. Traditional banks and payment providers typically apply a markup of 2–6 percent above the mid-market exchange rate, which Malhotra notes can significantly inflate large-ticket transfers like tuition fees. For instance, if the interbank rate is Rs 87 per dollar but a bank offers Rs 90, a family transferring $10,000 could lose Rs 30,000 due to the 3.45 percent markup alone.

Transaction fees add another layer of expense. Malhotra points out that wire transfers often incur sending charges, intermediary bank fees, receiving charges and currency conversion surcharges on debit or credit cards, collectively adding thousands of rupees per transaction. Taneia Bhardwaj, South Asia expansion lead at Wise, an international money transfer platform,  reinforces this, citing their Education Beyond Borders report that stated: “Indian families lost Rs 1,700 crore ($200 million) in 2024 in education transfers alone” due to markups of 3–3.5 percent and banking fees.

ATM surcharges further erode savings, especially for students abroad. Malhotra explains that withdrawing $200 from a foreign ATM might incur $10–15 in fees, including local ATM charges and bank fees, resulting in a 5–7.5 percent loss per withdrawal. Bhardwaj adds that frequent withdrawals using Indian debit or credit cards can cost Rs 300–500 each time, eating into funds meant for living expenses.

Beyond these, agent commissions exacerbate costs. Malhotra notes that some international colleges mandate payments through specific processors, limiting student choice and increasing fees. Additionally, education consultants may push families toward banks or remittance services with hidden commissions, which are passed on without clear disclosure.

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The impact of poor planning

Rushed payments and lack of comparison amplify these issues. Malhotra emphasises that “last-minute transfers usually mean families miss out on better exchange rates,” increasing the risk of delays or peak-time fees. Similarly, Bhardwaj highlights that families often focus only on upfront fees, overlooking the total cost structure, including markups and hidden charges. For example, a family sending Rs 30 lakh annually might lose Rs 60,000–75,000 to markups, enough to cover months of living expenses or additional courses.

Smart hacks to save big

These costs are avoidable with informed choices and student-focused solutions. Malhotra recommends a zero-markup student forex card, which eliminates the 3–3.5 percent fees typically charged by regular credit or debit cards and waives ATM withdrawal fees. “Unlike regular cards, this forex card helps students save on every transaction abroad,” he says.

Bhardwaj advocates comparing exchange rates against the mid-market rate and understanding fee structures. “Even a 2–3 percent markup on large tuition transfers can translate into tens of thousands of rupees lost,” she warns. She suggests consolidating transfers to minimise fixed fees or spreading them out for percentage-based fees, depending on the provider’s structure. You can also leverage from digital tools like rate alerts and rate lock-in options to secure favourable rates when the rupee strengthens. Malhotra notes, “Even a 50 paise difference in the exchange rate can lead to savings of thousands on larger transfers.”

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Taking control of education costs

The high cost of studying abroad doesn’t have to be compounded by hidden fees. By comparing providers, using zero-markup forex cards and planning transfers strategically, students and parents can save significantly. As Malhotra aptly puts it, “For students already navigating the high cost of studying abroad, smarter remittance planning can make a meaningful difference.”