Learn essential tips to effectively manage your finances for study abroad. Discover budgeting strategies, cost-saving ideas, and financial planning to make your international education experience worry-free.
Introduction :
Studying abroad is a dream for
many students, offering a chance to immerse oneself in a new culture, gain a
global perspective, and receive a world-class education. However, pursuing an
international education can be expensive, with costs encompassing tuition fees,
living expenses, travel, and much more. To turn this dream into a reality, it's
crucial to explore the various financial options available for study abroad
programs and also plan well in advance in keeping sufficient deposits required
for the program.
Available Financing Options :
Let us first explain the various
finance options available for the study abroad program, their effectiveness, and how much finance is required for the study abroad program and also discuss how to plan, arrange, and manage those funds efficiently.
Scholarships and Grants:
One of the most sought-after
sources of financial aid for every student, studying abroad is scholarships and
grants. These funds do not require any repayment and can be awarded for
academic excellence, specific fields of study, or financial need. Many
universities and organizations offer scholarships for international students,
and some countries have government-sponsored programs as well. However, Scholarship depends upon the scoring
percentage of the student in exams like SAT, ACT, GRE, TOEFL, and IELTS. Only exceptional-scoring students can benefit the most from this option.
Student Loans:
Student loans are a common
choice for financing education, including study abroad programs. Banks,
financial institutions, and government agencies in some countries offer student
loans with favorable terms and interest rates. Research and compare loan
options to find the best fit for your needs.
Exercise a word of caution, about the interest rates, as Banking and
financial institutions charge exorbitant percentage rates for providing loans,
where you need to shell out another 30 to 50% of your finances in repaying with
interest.
Work-Study Programs:
Some countries allow
international students to work part-time during their studies to help cover
living expenses. Check the regulations in your host country and university, as
well as any restrictions on the number of hours you can work per week. This option
comes in handy to pay for grocery and utility bills while the student is studying
abroad and reduce some portion of the expense.
On-Campus Employment:
Many universities abroad
provide on-campus job opportunities for international students. These positions
can help you gain work experience while earning money to offset expenses. This option can be thought over only for the second
year and not the first year of study abroad.
Internships and Co-op
Programs:
Look for study abroad programs
that include internships or co-op opportunities. These programs may offer
financial compensation or academic credit, making it a win-win situation for
your education and finances. Many universities offer Internships and co-op
programs. Here comes the role of a
student, how he is performing in the first year, and how he is able to grab the opportunities
by applying to various companies confidently seeking internships or
co-ops.
For those who are not aware,
Internships are provided by companies for a maximum period of 3 months only,
whereas Co-op programs offer employment opportunities for a period of 6 months
duration. This can lead to a substantial
earning potential for a student during the second year of study. For exceptional students, the entire Tuition
Fees for both years can be covered by getting selected by top-notch companies
as co-ops and earning a good amount of money in 6 months. The hourly salary varies
from $21 to $26 which means the monthly earning can be $5,040 to $6,240 which
means he can save $ 30,240 to $37,440 in 6 months, which covers the tuition
fee. Purdue University offers an excellent opportunity for both internship and Co-op programs.
Savings and Family Support:
Whether are not your child
gets a scholarship, you need to plan for savings to be able to pay for abroad
study. If you or your family have
savings set aside for education, it can be a valuable resource to finance your
study abroad adventure. Discuss your plans with your family and explore their
willingness to support your education financially. We shall see the minimum financial
requirement for abroad study down below.
Crowdfunding and Fundraising:
In recent years, crowdfunding
platforms have become popular for students seeking financial assistance to
study abroad. You can create a campaign and reach out to friends, family, and
even strangers who may be willing to contribute to your educational journey. However, this option may not be effective unless
you have a vast network of people.
Part-Time Work Off-Campus:
Depending on the country and
visa regulations, you might be allowed to work off-campus while studying.
Investigate whether this option is available and if you can balance it with
your academic commitments. Check out Purdue University which offers various Off-campus programs for students.
Exchange Programs:
Some universities have
exchange programs that allow you to study abroad at partner institutions while
paying your home university's tuition fees. This can significantly reduce the
overall cost of your international education.
However, this exchange program will be only for a particular semester
or for a specific period and not for the entire duration.
Study Abroad Agencies:
Study abroad agencies and
organizations may offer financial aid or assistance in finding funding options
for your program. They can also provide guidance on budgeting and financial
planning. Again these agencies charge exorbitant
changes in providing financial aid and guidance and assistance right from
applying for colleges to visa and ticketing.
Meeting the Minimum Financial Requirement:
The minimum financial
requirements for applying to study abroad in the USA can significantly vary depending
on several factors, including the institution and the country you plan to
attend, your chosen program of study, and your intended duration of stay.
However, here are some key financial considerations and requirements that you
should be aware of:
Tuition and Fees:
You'll need to cover the cost of tuition and fees for your program. The tuition
costs can vary widely between universities and colleges. On average, tuition
for international students at public universities is lower than at private
institutions. Tuition can range from a few thousand dollars to over $50,000 per
year.
Living Expenses: You
must also budget for living expenses, including accommodation, food,
transportation, health insurance, and personal expenses. This amount can vary
greatly depending on the location of your chosen institution. Major cities tend
to have higher living costs than smaller towns.
Purdue University, Indiana offers a location advantage and has a lower cost of living compared to other
Universities.
Proof of Funds: Most
U.S. universities require international students to provide proof of sufficient
funds to cover their tuition and living expenses for at least the first year of
study. This can typically be shown through bank statements, affidavits of
support, or scholarship award letters.
You can also show, Market-linked investments with the projected maturity
value. So keep gathering and making a
financial index, showing your savings in Fixed Deposits, Mutual Funds, market-linked policies, and any other investment.
Visa Requirements: When
applying for a U.S. student visa (F-1 visa), you'll need to demonstrate that
you have the financial means to support yourself throughout your studies. The
specific financial documentation required can vary, so it's essential to check
with the U.S. embassy or consulate in your home country for the most up-to-date
information.
Work Opportunities:
While studying in the U.S. on an F-1 visa, you may be eligible for on-campus
employment, which can help with living expenses. However, it's essential to
understand the regulations and limitations associated with working as an
international student.
Bank Statements and Affidavits: You
may need to provide bank statements or affidavits of support to prove your
financial stability. These documents should demonstrate your ability to cover
tuition and living expenses.
Health Insurance:
Health insurance is mandatory for international students in the U.S. You'll
need to budget for health insurance premiums, which can vary depending on the
institution.
How to manage the Financial Requirements? :
Managing the financial
requirements for studying abroad necessitates careful planning and
resourcefulness. It begins with thorough research into the cost of tuition,
living expenses, and other associated fees at the chosen institution and
destination. Creating a realistic budget that factors in all expenses is
crucial. Seek out scholarships, grants, and financial aid opportunities both
within your home country and the host country to alleviate the financial
burden. Maintaining a disciplined savings plan and exploring part-time work
options, if allowed by your visa, can contribute to your financial stability.
Additionally, consider opening a bank account in the host country to facilitate
financial transactions and access to funds. Regularly monitoring and adjusting
your budget as needed will help ensure a smooth and financially sustainable
study abroad experience. Here are some
of the useful tips for effectively managing the Financial requirement.
Try to arrange your own funds:
As far as possible try to
manage and arrange your own funds from your savings from various sources like bank fixed deposits, Market linked policies, Mutual Funds, etc. This is because you will not be spending any
extra amount apart from this by way of interest. For some it may seem easy to take an education
loan rather than funding yourself, however, the impact of funds flow should
also be calculated while repaying the same as it involves huge interest rates
and you will end up paying almost double the cost for your tuition fee.
Do not engage Study Abroad
Agencies: No doubt Study Abroad Agencies take care of hustles right
from applying for Universities, getting selected, applying for visas, booking
tickets, and arranging for tuition fees. However, these Agencies charge exorbitant charges for all the services. It is not rocket science to apply and get
selected in Universities and careful planning and research by the student at least one year before the planned study will make the student perfect in getting to
know about the formalities of applying, post selection of the candidate, applying
for Visa, booking air tickets, etc. Every
time you apply through an agent you will be shelling out extra money. By doing
it yourself, you can save a lot of money.
Plan for opening a local Bank
account in the country of study: Opening a local bank
account in the name of the student is an important step towards paving the way for
saving money. This is because transferring
money from the home country to the country of study can be made seamless and as and
when required with no Agency cost or service charges.
Getting an International Student
Prepaid Card: Apply and get one International Student Prepaid
card which will be very handy in making small payments and also to top up
payments can be done in the card seamlessly from the home country bank
account.
Open Multiple Bank Accounts in
Home Country: Open Multiple Bank accounts in the name of
all family members who are adults in the Home country. You will realize the need
for this only after transferring the first year’s tuition fee. Yes, Banks also have some threshold limits for
Funds Transfer from their Home country to the Country of abroad study. The current threshold for transferring the amount is 7 Lakhs INR per financial year per person. Up to 7 Lakhs, there is no TCS
applicable.
For those who are not aware,
TCS is Tax Collected at Source that is levied for every foreign remittance made
from the Home country. Tax collection at source (TCS) for foreign remittances under LRS was raised from 5% to 20% in
Budget 2023 and proper planning can save you from evading this tax.
Consider you need to send INR 28
Lakhs for the first year. By having 4
different bank accounts, you can
transfer 4 times from all 4 bank accounts thereby not crossing the 7 Lakhs threshold
and saving the TCS amount. TCS is considered
for every account that is linked with a PAN Card.
Book Jointly: By making joint bookings or group
bookings both for Air travel and accommodation, you can save a lot of money
that can be used for paying Utility Bills.
Students selected from the same University can form a group on WhatsApp or
Telegram to discuss and finalize their stay and make a joint booking in order
to save a lot of money and avoid the difficulty of searching while landing for
the first time in the Country study.
Conclusion :
In conclusion, studying abroad
is an enriching experience that comes with its financial challenges. However,
with careful planning, research, and a proactive approach to seeking financial
aid, you can make your dream of international education a reality. By exploring
and researching various options, you can align yourself at every stage of the program and be prepared for
the next stage of the study program.