As the curtain falls on 2023, here’s a panoramic view of the year’s data regarding cost-effective options for students seeking education abroad and the regulatory changes impacting their finances
As 2023 draws to a close, all transformative trends in foreign education brought to light can provide guidance to students planning to go abroad for studies in 2024. Industry experts shed light on many transformative trends that happened in 2023. These perspectives offer a comprehensive view of student preferences when going abroad, financial shifts, and the evolving landscape of regulatory measures.
Says Rajesh Kachave, chief business officer of student lending and insurance business, Avanse Financial Services, “The US continues to be one of the most sought-after destinations due to top-notch universities, a plethora of study programs, research-oriented coursework, internships, and job opportunities.” The Open Doors 2023 report on International Educational Exchange has also revealed that the US saw a 12 per cent increase this year in Indian student intake.
According to Kachave, the UK, Canada, Germany, Ireland, Australia, New Zealand and France are other popular options. Lately, students have also been seen pursuing higher education in countries, such as the UAE, Saudi Arabia, and some Nordic countries like Denmark, Sweden, and Finland due to their student-friendly environment.
Germany stands out as the most cost-effective destination for Indian students, as many public universities there offer low-cost or tuition-free education, requiring students to cover only living expenses, says Kachave. France is also popular for its low tuition fees among students, Kachave added.
Rohit Gajbhiye, founder and managing director of edu-fintech startup LEO1 also has the same view.
He says that the cost of living in Germany is also less, especially compared to other Western European countries. According to Kachave, the US, and the UK allow students to work part-time for 20 hours a week, thus enabling them to support their lifestyle. Canada had extended a temporary policy where students could work more than 20 hours per week, until April 30, 2024, which applies to students who have already submitted a study permit application as of December 7, 2023.
The US, the UK, and Canada offer post-graduate work visas, which allow students to stay in their host country after completion of their course for a certain number of years, depending on their course, to work or explore job opportunities. For instance, students can opt for optional practical training (OPT) for up to one year, which can be extended to 24 months in case of STEM courses to work in the US.
There has been notable change in admission criteria in Australia and Canada, with the former raising English proficiency test requirements and the latter raising the cost-of-living requirement for study permit applicants. The required IELTS score will increase from 6.0 to 6.5 for those applying for a Temporary Graduate visa. Similarly, student visa applicants will now need a score of 6.0, up from the previous requirement of 5.5, to study in Australia.
“The Immigration, Refugees, and Citizenship Canada (IRCC) of the Canadian government has declared an increase in the cost-of-living requirement for study permit applicants. International students will now have to show access to CAD 20,635 from the previous amount of CAD 10,000, which had been in effect for approximately two decades, as part of the new financial requirement put in place,” Kachave said.
From October 1, 2023 changes in tax collection at source (TCS) have come into effect. If the source of funding is not an education loan, then money remitted overseas for the purpose of education attracts TCS at 5 per cent if the amount exceeds Rs 7 lakh. If the source of funding is education loan, it will attract TCS of 0.5 per cent. Also, the interest paid on this education loan can be claimed as a deduction under section 80E of the Income-tax Act, 1961. Further if no connection can be established between spending and education, it will be counted as personal expense and attract TCS of 20 per cent.
Kachave highlights the emergence of hyper-personalised loan products for students pursuing overseas higher education covering their tuition fees, living expenses, and associated costs with flexible repayment terms. He says student-centric organisations evaluate the student profile based on parameters, such as academic performance, entrance exam score, pedigree of the educational institute and many more such parameters to determine the employability score of the student.
Gajbhiye says that the rise of innovative financing models, such as income-sharing agreements (ISAs), and the increased availability of online courses are cost-effective alternatives. Foreign governments and institutions are actively enhancing scholarship opportunities, he adds.