The Institute of International Education estimates, there are about 2 lakh Indian students studying in the United States. In terms of the number of foreign students sent to the US, India is now second only to China. There has been a consistent rise in the number of Indian students studying in the US in recent years, with a 19% increase between the academic years 2021 and 2022. This pattern is likely to persist as more and more Indian students seek to enroll in American universities and colleges to benefit from the top-notch education and wide range of opportunities they provide.
While the country remains the top choice for studying abroad, the costs of studying in the USA for Indian students can appear to be quite daunting. The rising inflation and a weakening rupee against the dollar can also have a significant impact on Indian students as the cost of living in the US increases due to inflation.The combined effect of these two factors can make the cost of education and living expenses in the US much more expensive for Indian students and their families.
For many students, studying abroad is a once-in-a-lifetime opportunity, but it can also present its share of financial difficulties. Unfortunately, a lot of students make the same blunders when it comes to money, which can cause stress, debt, and other issues. As per the data, 70% of college students have experienced financial stress. The personal financial management experience in college life is a steppingstone towards professional and career life. Hence, it is imperative to hone your skills at knowing how to spend your money well on things that do matter.
Here are some of the most common financial mistakes that students make when studying abroad and how to avoid them.
- Lack of knowledge about foreign exchange rates: Foreign exchange rates refer to the value of one country’s currency to another country’s currency. When studying abroad, international students need to be aware of foreign exchange rates to budget and manage their finances effectively as the exchange rates fluctuate constantly and can greatly affect the cost of tuition and living expenses. A change of a couple of rupees up or down against the dollar can make a serious impact on your overall budget. For example, doing an undergrad in the US easily costs around $300,000. If the dollar appreciates by say 5 rupees, it comes out to be a difference of whopping 15 lakh rupees.
- Underestimating living expenses: It is a common financial mistake that overseas students g in the United States may make that includes things like housing, food, transportation, and personal expenses. These costs can add up quickly, and many students may not realize just how much they will need to budget for these expenses. One of the main reasons students may underestimate living expenses is that they are not familiar with the cost of living or students may not realize that rent and utilities can be quite expensive in some parts of the country. To avoid underestimating living expenses, students should research the cost of living in the area where they will be studying and make a realistic budget for this. They should also talk to other students or to school officials to get a better understanding of what to expect. Additionally, students should also consider what extra expenses they might have such as medical, travel and other personal expenses, and keep a good buffer in their monthly allowances for this.
- 3. Paying tuition by international wire: This is a common method for international students in the United States to pay for their education. An international wire transfer is a method of electronic funds transfer that enables students to send money from a bank account in their home country to a bank account in the United States. This can be used to pay for tuition fees, housing, and other expenses associated with studying.However, there can be challenges when paying tuition by international wire transfer such as heavy bank fees, delay in payments, and exchange rate fluctuation and they are hard to track and increase the risk of fraud at their institution. Therefore it is important to research alternative payment methods such as currency exchange services or prepaid cards.
- Not applying for merit-based or academic scholarships: This is a serious financial mistake that students should avoid. These scholarships can be a significant source of financial assistance for students and can help to reduce the overall cost of tuition and living expenses. Hence, it is important to research the available scholarship opportunities by writing an email to the International Admission Office.In addition, students should also check with the university’s financial aid office for scholarship programs.
- Lack of clear understanding of International Student Loans: A lot of students take education loans without understanding the dynamics behind them. To understand, international student loans may have different interest rates, eligibility criteria, and qualifications compared to domestic loans. To avoid this, students should research and understand the different types of international student loans available, and the process of repayment and try to compare different banks and companies to get a better deal.
Communities can also play a vital role in providing support and advice on financial management like budgeting, spending and investment for international students. These groups can build a platform for students to share their experiences and offer support and advice on financial management. This helps save time and avoid pitfalls in the overall tedious process. They can also offer resources such as counseling, financial assistance or emergency funding for students who are facing financial difficulties. “Niyo Global community is one such community that can help you with money management while planning for studies and living in the US. You can join the community”
In conclusion, financial planning is essential for .students studying abroad as it can help them manage the high costs of international education, budget for unexpected expenses, and also help them to have a better credit score and make them financially stable for the future.
attributed to- Siddharth Kothari, Head at Niyo community
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