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What are the total costs of studying abroad?

What are the total costs of studying abroad?While the prospect of gaining life experience along with quality education abroad are good reasons to plan for your child, be warned that tuition is not going to be the only spend you have to plan for.

There is no debating the fact that Indians are spending a lot more on educating their children overseas. The latest data from RBI suggests that around US $3.5 billion has been spent between April and October 2019, a 77% increase compared to the same period in 2018 and more than 16 times what was spent in 2010. 

Why is it happening? Awareness about differentiated courses overseas, better access and of course the unattainable cut off marks for domestic colleges give many a student the push to search overseas.

While the prospect of gaining life experience along with quality education abroad are good reasons to plan for your child, be warned that tuition is not going to be the only spend you have to plan for. 

The top three costs you should plan and account for:

1. Tuition 

Clearly, it is the biggest wallet spend when it comes to studying abroad. Data shows that US, Canada, Australia and the UK are preferred destinations for Indian students for undergraduate courses. In the US, basic tuition fees can range from Rs 10 lakhs to 25 lakhs (or more) per year, depending on the State and whether you choose a public or a private university. For a 4 year honours degree this means a tuition cost of anywhere between Rs 40 lakh to upwards of Rs 1 crore. Tuition costs are likely to be lower by 40%-50% in the UK, Canada and Australia as compared to the US. While some colleges may cover costs of books and stationery, others may not. For post graduate degree courses of a two-year period your annual tuition cost can easily double. 

2. Accommodation

The next big cost you have to contend with is a place to stay. The costs vary and it is cheaper to live on campus, but accommodation may be limited. In which case you will have to live off campus. Accommodation costs can range from Rs 3 lakhs per year to Rs 10 lakhs. It really depends on the country you are in and whether the university is within a big city or outside. In big cities, costs will be higher.

These are the costs that you have to deal with while overseas, but the expenses really begin even before you get there. There are the various qualifying tests you need to take like TOEFL, SAT, GRE and so on. Application fees for each of these usually range between Rs 10,000-Rs 15,000. Repeats will cost more. Once you get in to the university, there is the VISA application fee to contend with, which could be another Rs 10,000-15,000.

3. Food, travel, and lifestyle

Food is something you will not be able to escape and for students, cooking their own meal won’t come until much later. Even if one were to start cooking it is unlikely that homemade food will happen every day of the week. One can spend as much or as little on food. Budgeting around Rs 2-3 lakhs a year should suffice for covering meals and some frills. Unless you live on campus, travel costs need to be budgeted in. There will be some shopping of utilities, apparel, shoes and the like. It may not be a high proportion of the tuition fee, but say 15%-20% of the tuition is a reasonable budget to work with. 

These are the costs that you have to deal with while overseas, but the expenses really begin even before you get there. There are the various qualifying tests you need to take like TOEFL, SAT, GRE and so on. Application fees for each of these usually range between Rs 10,000-Rs 15,000. Repeats will cost more. Once you get in to the university, there is the VISA application fee to contend with, which could be another Rs 10,000-15,000.

Lastly, you will have to budget for trips made back and forth from India, which, depending on the place, number of times and people travelling can range between Rs 5-10 lakhs or upwards for the tenure of the degree. 

What’s the total?

This is a minimum spend of Rs 15-25 lakhs in the first year itself assuming the cheapest course and accommodation. Needless to say, this amount can go up well beyond your budget depending on the chosen course and location. Looking at these numbers, it's hardly a surprise that spending on overseas education is increasing at such a fast pace for Indian students. What’s more critical is that you also understand these nuances and start planning early. 


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