A Falling Rupee May Hurt Your American Dream: MS In US

MS In US

Amit, a student of Indian Institute of Technology Varanasi, aspires for a career in computational mechanics. He is inclined towards pursuing MS in US because of the excellent research opportunities that the US universities provide. Further, the R&D job prospects that he is unlikely to get in India excites him. He is planning to join the Fall semester of 2019. Like all other students who are keen to pursue higher study in the US, he is preparing for Graduate Record Examination  (GRE) and TOEFL.

However, Amit belongs to a middle class family and he was a recepient of Merit-cum-Means scholarship at IIT. He comes to know from his seniors that on an average he has to apply to 10 US universities that comprises of a mix of moderate, safe and ambitious universities to get a fair set of options at the end.

While there are several other MS aspirants like Amit with BIG dreams, a falling rupee has added to their woes. On an average, the application fee to a US university costs around $75. GRE and TOEFL scores are mandatory to be sent to US universities. Sending GRE scorecard to each university costs $27 and TOEFL scorecard costs $20. So, on an average, an applicant has to spend $120 per university application.

On one hand, the scholarships to international students are scanty and the falling rupee has added to the woes of the students. While I was applying for the US universities in December 2017, the Rupee to Dollar price was pegged around 64. At the time of writing this article, the rate has gone above  70 for $1.

Tuition Fees at US Universities

The figure below shows the tuition fees for various US universities as of 2017.

Cost For MS IN US

Most US universities are known to hike tuition fees every year.  Over the last 5 years, the cost of in-state tuition fees in US universities rose by 13.5% thus, becoming a major factor in the declining number of undergraduate intake in the last 5 years. The figure below shows the hike in tuition fees in US universities by state.

Tuition Fee Hike In US
Source: Quartz

US students themselves find it difficult to attend a US university. They prefer European universities with lower or no tuition fees and the European universities have seen a surge in the number of American students. Even UK universities attract American students for their 1-year postgraduate courses.

High Cost Of Application

On an average, an international student applies to 10 universities for MS in US. So, if you are applying to 10 US universities, be ready to spend at least $1200 or  ₹84,000 on application fees alone.

The surge in the price of tuition fees due to the falling rupee will lead to a surge in your estimated budget. I was selected for an MS in Biomedical Engineering at Carnegie Mellon University. The tuition fees for the first year was $47,500. The cost of living specified by the university was $20,000. In order to get my I-20 (confirmation letter), I had to show to the university liquid fund of $67,500 ( ₹43,20,000 as of March 2018) on my bank statement. However, while the classes start in August 2018, I would have actually needed  ₹47,00,000 to sustain myself financially. There is a straightforward  4,00,000 hike in my expenses per year due to the falling rupee.

Education Loans

Interest on Education Loan In India
Note: The rates are only for secured loans. The interest rate on unsecured loans is 1%-2% higher.                      Source: My Loan Care

While  4,00,000 may not seem to be a large sum for affluent and well-off families, but most students going for masters take hefty loans. After the recent RBI directive to hike the repo rate, the interest rate on educational loans for study abroad has crossed over 10% in all major nationalized banks. State Bank of India (SBI) offered me an education loan at 10.65%.  Private banks and other financial agencies like Avanse and Credila provide loans at 11.5%-14% interest rate.

So, if a student borrows 40,00,000 for his postgraduate study at 10.65% interest rate, at the end of 5 years (considering the moratorium period of 2 years where interest is calculated on simple interest basis and provided he starts paying every month immediately after postgraduation), he would have to pay at least a whopping sum of ₹55,00,000 to come out debt-free.

Note: I have used conservative calculation. The actual amount is likely to be more than ₹55,00,000.

Interest rates on education loans by banks in India is one of the highest in the world.

Living Expenses In US

The average living cost for an Indian student in the US varies from $15000 per year in Texas to $25000 per year in Boston. Many Indian students take up on-campus part-time jobs like a library attendant, record maintenance at the parking lot, administrative attendant, courier delivery, resident attendant etc. that don’t bring much value to the resume and the pay is $10-$15/hour.

A few fortunate ones get the Research Assistant (RA) and Teaching Assistant (TA) positions. The TA posts in most universities are reserved for Ph.D. students. Further, students going to pursue a Professional Master’s degree (terminal master’s) are not eligible for RA and TA.

The dollar to INR rate is predicted to slide further and some experts speculate that it may reach up to ₹72.50 in the next few weeks.  Under such circumstances, MS in the US without scholarships doesn’t sound a financially viable dream.

The Path Ahead

International students graduating from lower ranked US universities often don’t find jobs immediately after graduation. Further, the starting salary of these graduates is lower than those graduating from Tier I and Tier II universities.

A student graduating from a top tier US university like Carnegie Mellon, Northwestern University, University of Minnesota, MIT, University of Texas Austin etc. in an engineering discipline is usually able to pay off the debt incurred during the study in 2.5-3.5 years.

The US student Visa (F1) is issued for 5 years. Considering the two years of study and the 3 years of OPT (job/practical experience), it can be assumed that by the time a student graduates, he would hardly have any savings.

Key Statistics

  • The number of Indian students going for MS In US has been falling since 2016.
  • The Student Loan Debt in the USA is over $1.4 trillion
  • Canada, France, Ireland, and Germany have seen a surge in Indian postgraduate students since 2016.
  • The number of students going to Ireland for a postgraduate study has gone up from 2000 in 2015 to a little over 3000 in 2017.
  • France and Ireland have extended post-study work period for up to 2 years for Indian students.
  • Germany offers 18 months post-study work Visa.
  • Canada offers post-study work visa up to 3 years and further, a path to permanent residency (PR). A Canadian PR opens up job avenues in the US.

The Numb Conclusion

Ph.D. degrees in the US are usually fully funded and recognized across the globe. In a fully funded Ph.D., a student is waived off from the tuition fee payment and he is provided with a handy stipend of around $2000-$3000 per month.

Unlike European universities, one can pursue Ph.D. in most of the US universities directly after B.Tech./B.Eng. The US is still the best destination for Ph.D. in a STEM field.

Numb Tip: One should go for MS in US if he receives even a partial scholarship. As I said, US is still the best destination for the quality of education in STEM fields. However, one should go for only Tier I US universities. It’s pointless to spend a huge sum on a degree from Tier II or lower ranked US universities.

 

Numb Opinion: If one is very talented and skillful at his job, he would definitely find a great job suiting his intellect in any country. I read Nistha Tripathi’s blog post where she says that employer keen to retain employees transferred them to their UK and Canada offices when they  were unable to get H1B visas. So, why not pursue Master’s in the UK or Canada if that’s likely to be the fate?

No wonder, a master’s degree from a Tier I US university and the work experience at a US firm can get you a job in any part of the world. However, considering the huge costs incurred during the study, the sliding dollar to rupee exchange rate and the diminishing number of H1B visas to Indians, one should reconsider his decision to pursue MS in US and search for affordable study destinations.

2 Replies to “A Falling Rupee May Hurt Your American Dream: MS In US”

  1. This was really a good explanation .. and can help many people to choice between selecting USA and Europe

    1. Thanks Arshad! It’s good to know that this article will help you in choosing universities for Master’s abroad.

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