Impact-of-Rupee-Depreciation-on-Indian-Students

The Impact of Rupee Depreciation on Indian Students Studying in the United States: Challenges and Solutions

Introduction

In recent years, there has been a significant rise in the number of Indian students pursuing higher education in foreign countries. According to government and industry reports, over 1.3 million Indian students were studying abroad in 2024, with the United States, Canada, the United Kingdom, Australia, and Germany being the most preferred destinations. This trend reflects the increasing aspirations of Indian students to gain global exposure, access better career opportunities, and receive high-quality education that is often perceived as lacking in India. Despite the expanding higher education sector in India, many students feel compelled to seek education abroad due to several critical factors, including the following:

Limited Seats in Premier Institutions

- The Indian education system has a few top-tier institutions like the IITs, IIMs, AIIMS, and IISc, but the admission process is highly competitive.
- Millions of students apply for a few thousand seats, making it difficult for deserving candidates to secure admissions.

Quality of Education and Research Opportunities

- Many foreign universities offer advanced research facilities, interdisciplinary courses, and industry collaborations, which are often limited in Indian universities.
- U.S., Canadian, and German universities rank higher in global education rankings, attracting Indian students seeking cutting-edge knowledge.

Better Career Prospects and Global Exposure

- Degrees from top foreign universities often lead to higher salaries, better job placements, and global career opportunities.
- Many multinational corporations prefer hiring graduates from internationally reputed institutions.

Infrastructural and Faculty Gaps in Indian Institutions

- Many Indian universities struggle with outdated curricula, faculty shortages, and inadequate funding for research; this drives students to look for world-class education abroad to gain a competitive edge in their careers.

The Table below presents information about Indian students studying abroad, which is enormous; by paying a high tuition fee and on account of subsistence, they contribute to a tremendously exciting economy for these countries.

The number of Indian students pursuing education abroad has significantly increased over the past decade. This trend reflects a growing emphasis on global education in India and the desire of its youth to gain international exposure. Below is a table summarizing the number of Indian students studying in major destination countries over recent years:

Table: Indian Students Abroad by Country of Destination

Country	2019	2020	2021	2022	2023	2024
Canada	183,310				233,532	427,000
United States				211,930	234,473	337,630
United Kingdom				139,539	136,921	185,000
Australia	100,009					122,202
Germany				33,753		42,997
Total Abroad	586,337	259,655	444,553	750,000	892,989	1,335,878

Growth Trend: There is a consistent upward trajectory in the number of Indian students opting for education abroad, with a notable surge post-2020.
Preferred Destinations: Canada and the United States remain the top choices for Indian students, with significant enrollment increases over the years.
Impact of Global Events: The dip in the year 2020 is attributed to the COVID-19 pandemic, which affected international travel and admissions.

The above data underscores the increasing aspiration among Indian students to seek international education, driven by factors such as quality of education, global exposure, and better career prospects.

Rupee Depreciation & its Impact on Students

The Indian rupee has witnessed significant depreciation against the U.S. dollar, reaching approximately ₹87 per USD in 2025 (see the Table below). This trend indicates continued depreciation, making it essential for students to plan their finances accordingly. This depreciation has far-reaching consequences, particularly for Indian students studying in the United States. The rising tuition, living expenses, and loan repayments have placed an increasing financial burden on students and their families.

Trends in INR/USD Exchange Rate Over the Last Decade

Year	2015	2016	2017	2018	2019	2020
Exchange Rate (₹ per USD)	₹62.97	₹66.46	₹67.79	₹70.09	₹70.39	₹76.38
Year	2021	2022	2023	2024	2025
Exchange Rate (₹ per USD)	₹74.57	₹81.35	₹81.94	₹84.97	₹87.00 (Approx.)

Source: Federal Reserve Economic Data (FRED).

The Present Article

This article examines the challenges posed by rupee depreciation, the role of the Indian government, support from banks and financial organizations, and solutions for managing the impact of a weakening currency.

Impact of Rupee Depreciation on Indian Students and Their Families

The impact of Rupee Depreciation on Indian students and their families back home in India is enormous; a few significant heads are presented below:

Increased Cost of Tuition and Living Expenses

While in a foreign country, a significant amount is incurred on account of tuition fees, even after a very high scholarship. A depreciating rupee makes tuition fees and living expenses more expensive in rupee terms. For instance, a Master’s program costs around $40,000 per year when the exchange rate was ₹70/USD amounted to ₹28 lakh. At the current rate of ₹87/USD, the same program costs nearly ₹34.8 lakh, a 24% increase.

Higher Education Loan Burden

Most Indian students rely on education loans to finance their studies. Rupee depreciation leads to:

Higher loan amounts in rupee terms
Increased interest payments and EMIs
Longer repayment periods

For example, a student taking a ₹30 lakh loan when the rupee was at ₹70/USD would now need nearly ₹37 lakh at ₹87/USD, increasing their repayment burden.

Financial Strain on Parents

Due to exchange rate fluctuations, parents supporting their children’s education through personal savings or loans face higher remittance costs. Many have to:

Liquidate savings or investments
Take additional loans
Cut down on personal expenses

This has made it more challenging for middle-class families to afford education in the United States or other countries.

How Students Can Manage Financial Challenges

While still in the United States, like other international students, students from India also support their financial challenges.

On-Campus and Part-Time Jobs

Students in the United States can work up to 20 hours per week on campus and full-time during vacations in jobs such as:

Library assistants
Cafeteria workers
Administrative Staff etc.

Teaching and Research Assistantships

Graduate students can secure the following:

Teaching Assistantships (TAs)
Research Assistantships (RAs)

These often provide tuition waivers and stipends, significantly reducing costs.

Scholarships and Grants

Students should apply for merit-based and need-based scholarships such as:

Fulbright-Nehru Master’s Fellowships
Inlaks Shivdasani Foundation Scholarships
Tata Scholarship for Indian Students at Cornell University

Financial Planning and Currency Risk Management

Forex forward contracts can lock in exchange rates
Maintaining a U.S. dollar account helps reduce rupee volatility risks
Using Forex cards minimizes currency conversion losses

Government Support for Students Studying Abroad

The Government of India has launched number of schemes to help students pursuing higher education abroad:

National Overseas Scholarship (NOS): Provides tuition and living expenses for students from disadvantaged backgrounds (Ministry of Social Justice).
Ambedkar Interest Subsidy Scheme: Offers interest-free education loans to OBC and EBC students for postgraduate studies abroad.
Fulbright-Nehru Fellowships: A collaborative initiative between India and the U.S. that provides postgraduate and doctoral studies funding.

However, no specific government scheme is designed to address the direct impact of rupee depreciation. Students and parents must rely on financial strategies to manage currency fluctuations.

Bank and Financial Institution Support for Students and Parents

Several banks and organizations provide financial solutions to help Indian students and their families mitigate the impact of a weakening rupee. By leveraging these services, students can hedge against currency fluctuations and reduce financial strain.

Significant Areas of Concern and Possible Solutions

Concern	Solution
Rising tuition and living costs	Apply for assistantships, part-time jobs, and scholarships.
Increasing education loan burdens	Seek interest-free government loans and refinance existing loans.
Parental financial strain	Hedge against exchange rate fluctuations using forex management tools
Limited job opportunities for students	Utilize CPT, OPT, and remote freelance work.

Concluding Observations

The depreciation of the Indian rupee against the U.S. dollar has significantly increased the financial burden on Indian students studying in the United States. Rising tuition fees, living costs, and loan repayment difficulties make it essential for students and their families to explore financial planning strategies, government schemes, and banking solutions.

While the Indian government provides scholarships and loan subsidies, there is no dedicated scheme to counter rupee depreciation. Banks and financial institutions offer forex solutions and education loans, but proactive planning is crucial.

As the rupee continues to depreciate, a long-term strategy involving currency hedging, diversified funding sources, and cost-cutting measures is essential to sustain the dream of studying in the U.S. despite economic challenges.

FAQs on the Impact of Rupee Depreciation on Indian Students Studying in the United States

1. Why does the depreciation of the Indian rupee affect Indian students in the U.S.?

The rupee depreciation increases the cost of tuition, living expenses, and loan repayments in rupee terms, making education abroad more expensive for Indian students and their families.

2. How much has the Indian rupee depreciated against the U.S. dollar in recent years?

The rupee has depreciated from approximately ₹62.97 per USD in 2015 to around ₹87 per USD in 2025, leading to a significant rise in expenses for students studying in the U.S.

3. What do Indian students face the main financial challenges due to the rupee depreciation?

Increased tuition fees in rupee terms
Higher loan amounts and EMIs
Rising cost of living and accommodation
More significant financial strain on parents and families

4. How can students reduce the financial impact of rupee depreciation?

Students can:

Apply for scholarships and grants
Work part-time on-campus
Secure teaching or research assistantships
Use forex management tools to hedge against currency fluctuations

5. Are there any scholarships available for Indian students studying in the U.S.?

Yes, some notable scholarships include:

Fulbright-Nehru Master’s Fellowships
Inlaks Shivdasani Foundation Scholarships
Tata Scholarship for Indian Students at Cornell University

6. Can Indian students work while studying in the U.S.?

Students can work up to 20 hours per week on campus during academic sessions and full-time during vacations. Graduate students can also take up teaching or research assistantships.

7. How does rupee depreciation impact education loans for Indian students?

Since most education loans are taken in rupees, a weaker rupee increases the total amount required to fund education abroad. It also raises interest payments and prolongs repayment periods.

8. Does the Indian government offer financial assistance to students studying abroad?

Government schemes such as the National Overseas Scholarship and Dr. Ambedkar Interest Subsidy Scheme help students from disadvantaged backgrounds by covering tuition and living expenses. However, these schemes do not directly address rupee depreciation.

9. How can parents manage currency fluctuations while sending money abroad?

Parents can:

Use forex forward contracts to lock in exchange rates
Open a foreign currency account for their children
Use Forex travel cards to avoid multiple conversion fees

10. What banking solutions are available to mitigate the impact of a weak rupee?

Banks offer:

Education loans with flexible repayment options
Forex cards to minimize exchange rate losses
Currency hedging options to protect against rupee depreciation

11. What are the alternatives for students who find studying in the U.S. too expensive?

Students can consider:

European countries with lower tuition fees (e.g., Germany, France)
Hybrid programs that allow partial online learning from India
Indian universities collaborating with foreign institutions for exchange programs

12. What long-term strategies can students adopt to cope with currency depreciation?

Diversify funding sources (loans, savings, scholarships)
Plan for forex fluctuations in advance
Explore cost-cutting measures such as shared accommodation and meal plans

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