Studying abroad? Beyond college fees, here are 5 additional costs you should budget for

So, if you're planning to study abroad, here’s what you need to budget for, apart from college and tuition fees.

Pre-departure costs

Universities charge fees for processing applications, which can vary widely depending on the country and programme. “For instance, the application cost at a university in the US is around $150. It varies with the course/programme you are applying for,” says Dubey. So, if you apply at five universities, your total application cost will be$750 (approximately Rs 62,500).

“Travel expenses, including airfare, airport taxes, and travel insurance, form a significant initial investment,” says Rohan Ganeriwala, co-founder and director, Collegify, a global education consultancy firm.

Then there will be visa application fees. These costs vary with the country you are traveling to. For instance, a one-way airline ticket to New York from Mumbai costs around Rs 65,000. The cost of the student visa application will be around Rs 29,300 ($350).

“There are also costs associated with taking standardised tests such as the GMAT, SAT, GRE, IELTS or TOEFL, including preparation materials and exam fees,” says Dubey. For instance, the exam fees for TOEFL and GRE are around Rs 16,900 and Rs 22,500, respectively. Gandhi, for instance, spent around Rs 80,000 on the IELTS and GRE exams, as he made multiple attempts to get a better score.

“Vaccinations mandated by the host nation and potential university health checks can add to pre-departure expenses,” says Ganeriwala. Students should research and budget for any necessary medical tests.

Some foreign universities ask for orientation fees from international students. This will be an add-on cost.

Health insurance costs

Foreign universities require international students to have health insurance, so factor in the premium. “You can opt to take an insurance policy from the insurance company partnered with the university or you can opt to take your own from India, covering students while studying abroad,” says Dubey. Indian insurance companies might offer competitive rates, especially for students with a strong health record.

“But the university might not accept an Indian insurance policy if it has specific health insurance requirements for international students,” says Ganeriwala. University-partnered plans may be more expensive than those offered by Indian providers, so consider this insurance premium cost in your budgeted expenses.

Students should compare costs, coverage details, and claim processes (both from Indian providers and the university partner) if the university allows a health insurance policy taken from India before travelling abroad. “Prioritising ease of claims processing might favor a university-partnered plan, especially in unfamiliar healthcare systems,” says Ganeriwala.

But many experts recommend buying a health insurance plan that the university offers, because that way you are in sync with campus requirements.

External coaching expenses

Several students need external support in the initial semesters as they have joined the programme from various streams and work experiences. The external coaching/tuition helps them address weak spots.

Education loans offered by financial institutions in India cover core expenses such as tuition fees and accommodation. “External coaching costs typically fall outside the purview of education loans,” says Ganeriwala. So, a student needs to budget for these expenses if she is weak in a particular subject, he adds.

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Cost of accommodation and deposit

Not all education courses offer on-campus housing; sometimes you have to fend for yourself. The rent and deposit cost is something many parents and students miss out on in their planning.

Accommodation costs also vary significantly. The location, type of housing, and amenities are key factors influencing the price. “On-campus housing typically offers the most affordable option, followed by shared apartments, with private studios or apartments commanding the highest rents,” says Ganeriwala. For instance, in the US, if you live in a smaller town, your shared house rent would be around $500 (i.e., around Rs 42,000) a month. But in a city like New York, San Francisco or Chicago, you would end up paying a rent of around $1,500 (i.e. around Rs 1.25 lakh) a month.

Deposit amounts can vary significantly depending on the chosen destination city, type of housing (on-campus housing, apartment rental, homestay), and even the specific location. “A general estimate suggests deposits can range from one to three months’ rent upfront,” says Ganeriwala. Gandhi paid two months’ rent as the deposit to the landlord, i.e., around Rs 50,000, before travelling abroad.

Thorough research into accommodation costs and average deposit requirements in your chosen destination is essential. University housing websites, student forums, and rental listings can provide valuable insights into estimated accommodation costs and deposit amounts.

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Impact of rising inflation and currency depreciation

Indian students have to incur the burden of both inflation in the foreign country and depreciation of the rupee. “The rupee depreciates, on an average, 3.5 percent to 4 percent per year against the USD,” says Dubey.

The most immediate consequence is a surge in overall costs. “Tuition fees, accommodation, and living expenses all become more expensive because of inflation pushing up the base cost of living abroad. The depreciating rupee compounds the problem,” says Ganeriwala. Everyday expenses like groceries, transportation, and leisure activities become more expensive for Indian students abroad.

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How to budget for additional estimated expenses

Check your university websites. “They often provide detailed information on estimated living expenses, including average costs for accommodation, food, transportation, and utilities,” says Ganeriwala. He also suggests getting in touch with financial aid offices at the universities if you have a query on, say, orientation fees or health insurance plans offered by the university.

Students should also network on social media and speak to seniors who have already attended the same university or lived in the same city in the last couple of years. “The seniors have a good sense of the costs you are likely to incur, beyond what is available on the website of the university,” says Vishal Dhawan, founder and chief financial planner of Plan Ahead Wealth Advisors.

For instance, Gandhi interacted with current students and local accommodation providers to obtain specific cost information before travelling abroad. He calculated estimated expenses and created a budgeting spreadsheet, categorizing costs (housing, food, transportation, etc) and researching average costs for each category. He also kept a 15 percent buffer for unforeseen costs and recommends other students do the same.