Indian families are set to nearly double their spending on foreign education for their children, projected to hit $91 billion by 2030, but a significant portion of this immense sum is lost to hidden bank fees and exchange rate markups.
The Soaring Cost of Global Education
Spending by Indian families on overseas education is expected to surge from $44 billion in 2024 to a staggering $91 billion by 2030. This massive increase highlights the growing aspiration among Indian students to pursue higher studies abroad.
The number of Indian students choosing international institutions is also predicted to rise sharply, potentially exceeding 2.5 million by 2030. They already make up about a third of international students in popular destinations like the US, Canada, UK, and Australia.
Hidden Fees Hitting Family Budgets
A significant chunk of this foreign education spending, around $11 billion in 2024, is met through money transferred from India. Unfortunately, over 95% of these remittances use traditional banking channels, which often come with a 3-3.5% markup on exchange rates.
For a family sending Rs 30 lakh annually, this could mean losing Rs 60,000 to Rs 75,000 to hidden charges. These costs collectively totaled $200 million for Indian families in 2024, a figure that could approach half a billion dollars by 2030.
RBI’s Push for Cheaper Transfers
The Reserve Bank of India (RBI) has noted these high costs and delays in cross-border transfers as a key concern. Globally, the average cost of sending remittances was 6.62% in late 2024, often escalating with more intermediary banks involved.
To combat this, the Indian government and RBI are promoting the linkage of instant payment systems, such as India’s UPI with Singapore’s PayNow. This initiative aims to make international money transfers faster and more affordable, expanding to more banks to facilitate smoother transactions.
Evolving Trends and Destination Choices
Despite the overall spending increase, money sent abroad for studies under RBI’s Liberalised Remittance Scheme (LRS) has shown a decline for nine consecutive months, falling 21% year-on-year in April.
This dip might be partly due to uncertainties in countries like the US, where student visa issuances to Indians saw a significant drop in 2024. However, traditional study hubs remain popular, while emerging destinations like Germany, Ireland, the UAE, and Singapore are gaining traction due to their affordability and post-graduation opportunities.
Key destination countries like Canada and Australia are also tightening their visa and admission policies, including increased proof of living expenses and higher English proficiency scores. This shift is prompting more students to explore alternative countries offering more streamlined processes and relaxed residency rules.
- Indian spending on foreign education is projected to reach $91 billion by 2030.
- Families lose significant amounts (up to Rs 75,000 per Rs 30 lakh sent) to hidden bank fees and exchange rate markups.
- The RBI is actively working to reduce cross-border transfer costs through initiatives like UPI linkages.
- While traditional destinations are popular, emerging countries are attracting students due to policy changes and affordability.
As global education continues to be a top priority for Indian families, finding cost-effective and efficient ways to fund these aspirations remains crucial.
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Indian families are set to nearly double their spending on foreign education for their children, projected to hit $91 billion by 2030, but a significant portion of this immense sum is lost to hidden bank fees and exchange rate markups.
The Soaring Cost of Global Education
Spending by Indian families on overseas education is expected to surge from $44 billion in 2024 to a staggering $91 billion by 2030. This massive increase highlights the growing aspiration among Indian students to pursue higher studies abroad.
The number of Indian students choosing international institutions is also predicted to rise sharply, potentially exceeding 2.5 million by 2030. They already make up about a third of international students in popular destinations like the US, Canada, UK, and Australia.
Hidden Fees Hitting Family Budgets
A significant chunk of this foreign education spending, around $11 billion in 2024, is met through money transferred from India. Unfortunately, over 95% of these remittances use traditional banking channels, which often come with a 3-3.5% markup on exchange rates.
For a family sending Rs 30 lakh annually, this could mean losing Rs 60,000 to Rs 75,000 to hidden charges. These costs collectively totaled $200 million for Indian families in 2024, a figure that could approach half a billion dollars by 2030.
RBI’s Push for Cheaper Transfers
The Reserve Bank of India (RBI) has noted these high costs and delays in cross-border transfers as a key concern. Globally, the average cost of sending remittances was 6.62% in late 2024, often escalating with more intermediary banks involved.
To combat this, the Indian government and RBI are promoting the linkage of instant payment systems, such as India’s UPI with Singapore’s PayNow. This initiative aims to make international money transfers faster and more affordable, expanding to more banks to facilitate smoother transactions.
Evolving Trends and Destination Choices
Despite the overall spending increase, money sent abroad for studies under RBI’s Liberalised Remittance Scheme (LRS) has shown a decline for nine consecutive months, falling 21% year-on-year in April.
This dip might be partly due to uncertainties in countries like the US, where student visa issuances to Indians saw a significant drop in 2024. However, traditional study hubs remain popular, while emerging destinations like Germany, Ireland, the UAE, and Singapore are gaining traction due to their affordability and post-graduation opportunities.
Key destination countries like Canada and Australia are also tightening their visa and admission policies, including increased proof of living expenses and higher English proficiency scores. This shift is prompting more students to explore alternative countries offering more streamlined processes and relaxed residency rules.
- Indian spending on foreign education is projected to reach $91 billion by 2030.
- Families lose significant amounts (up to Rs 75,000 per Rs 30 lakh sent) to hidden bank fees and exchange rate markups.
- The RBI is actively working to reduce cross-border transfer costs through initiatives like UPI linkages.
- While traditional destinations are popular, emerging countries are attracting students due to policy changes and affordability.
As global education continues to be a top priority for Indian families, finding cost-effective and efficient ways to fund these aspirations remains crucial.
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