The rupee fell to an all-time low of 80.05 against the dollar on Tuesday, fueling fears among study-abroad aspirants in India who are poised to spend substantially more money to realize their dreams than they originally planned to.
The rupee’s record plunge against the US dollar was primarily due to the continued strength of the American dollar, the elevated global crude oil prices, and the continuous outflow of foreign funds from the local market as foreign investors go from Indian stocks and other assets into dollar-denominated assets.
The rupee opened at 80 against the American dollar at the interbank foreign exchange on Tuesday, then lost ground to close at 80.05, registering a fall of 7 paise from the last close.
Fears of Dashed Study-Abroad Dreams
Generally, with the rupee hitting an all-time low, US imports, foreign education, and travel could all get very expensive. Indian students who wish to study abroad, particularly in the US, now fear that because they will have to spend a lot more just to pursue their plans to study abroad, they will no longer be able to afford the expenses.
Optionally, students can go instead to a destination country that is relatively cheaper in order to continue pursuing their international education aspirations. But students who have been wanting to pursue education in their dream study destinations say that considering a different country that is cheaper poses its own set of problems.
A Different Story for Working International Students in the US
It’s a different story, however, for Indian international students who are already enrolled in American universities and are pursuing part-time jobs there.
The weakening of the rupee means that the US dollars they earn and send home to India will now have a greater value in the foreign exchange. This also holds true for international graduates who have taken up gainful employment in the US after graduation and who send money home to their families in India.
Avoiding Permanent Fixes to a Temporary Setback
Financial experts believe the rupee’s temporary setback should not totally dampen students’ plans of studying abroad. It is also important to note that students plan their study abroad activities over several years. It is a well-thought-out decision and is not likely to change quickly.
Considering this, consultants believe that it does not make sense for students to suspend their plans to study abroad for a temporary fall of the rupee against the dollar.
“While the plunge of the rupee is an unfortunate development, the fluctuation of the value of currencies is the natural result of floating exchange rates, which is true for most major economies,” Sanjay Laul, CEO and founder of M Square Media, a global service provider and international education platform, notes. “It should not be considered a permanent situation and students should thus avoid making permanent decisions regarding a very important life event such as education.”
Laul also noted that despite the expected increase in international education expenses in the US, the country remains a highly attractive international education destination because of the many benefits for the students, one of which is the quality of education that they will get.