Study Abroad Planning: As more Indian parents aspire to send their children abroad for higher education, financial experts are warning that early and structured planning has become crucial amid rising education costs and rupee depreciation.
Speaking on Zee Business, mutual fund expert Vishwajeet Parashar highlighted that overseas education is no longer just an aspirational goal but a financially demanding commitment that requires long-term preparation.
Why parents ’emotional dream’ now needs financial discipline
“Sending children abroad for studies is a very emotional goal for every parent. Many want their children to study in top global universities like Harvard or Ivy League institutions and build a successful career,” Parashar said. “But due to the way the dollar-rupee exchange rate has moved and the continuous depreciation of the rupee, this is no longer a luxury. Planning must begin as early as possible.”
How rupee depreciation is increasing education costs
He noted that currency movement alone has significantly increased costs in a short span. “If the dollar was around Rs 83 two years ago and is now near Rs 95–96, a course that cost Rs 50–52 lakh earlier may now cost Rs 60–65 lakh, even without any fee increase,” he explained, adding that education inflation further compounds the burden at an estimated 12–13 per cent annually.
Why last minute planning can be risky
Parashar strongly advised against last-minute financial planning. “If your child is in school or will go abroad in the next one or two years, do not leave this for the last moment. Start building the corpus early,” he said. He also suggested considering forex planning tools such as forex cards, education loans, or hedging instruments to manage currency risk.
Do education loans offer any financial advantage?
Parashar further added that education loans can also provide tax benefits on interest payments under applicable tax provisions (such as the old tax regime), making them not just a funding tool but also a tax-efficient option.
When should parents start planning for foreign education?
Echoing similar concerns, Viral Bhatt, Founder, Money Mantra, emphasised that parents should ideally begin planning 18–24 months before the expected education timeline.
“If you have decided your child will study abroad for one to three years, start planning at least 18 to 24 months in advance,” Bhatt said. “Considering inflation and rupee depreciation, we are already seeing an 18–20 per cent increase in overall costs.”
How SIP-like forex planning can reduce risk
He recommended staggered forex accumulation, comparing it to systematic investment plans (SIPs). “Just like SIPs, you should reserve foreign currency in instalments instead of arranging it all at once. This helps reduce the impact of currency volatility,” he added.
What are the best ways to build forex reserves?
Bhatt also explained that families can gradually build forex reserves over time, including through structured savings approaches and foreign currency-linked accounts, ensuring that funds are not arranged in a lump sum at the last moment.
What payment options are available for students abroad?
Bhatt also outlined multiple payment options available to families, including multi-currency forex cards, international debit and credit cards, education loans, and wire transfers. “Each instrument serves a different purpose—forex cards for daily expenses, debit cards for emergencies, credit cards for large purchases, and education loans for major costs like tuition and accommodation,” he explained.
Why living costs matter as much as tuition fees
A key concern raised during the discussion was the importance of accounting for non-tuition expenses. Bhatt warned that tuition fees represent only part of the total cost burden.
“As a thumb rule, tuition fees account for about half of the total expenses. The remaining half includes living costs such as rent, food, transport, insurance, and travel,” he said. “Parents must plan for both components because students will face these expenses immediately upon arrival.”
Are credit cards a safe option abroad?
He further added that credit cards, while convenient, can carry additional charges of 2–3 per cent, and therefore should be used cautiously, especially for large or planned expenses. They are best reserved for convenience or emergency situations due to the extra cost burden.
Experts recommend a combined financial strategy
The experts also stressed that these financial instruments should not be seen in isolation but used together as a combined planning system, depending on timing and type of expense.
They further highlighted currency risk management strategies such as staggered forex purchasing and locking in exchange rates over time, treating foreign education planning similar to portfolio risk management.
The experts also stressed the importance of early education loan approvals. “Education loans should ideally be sanctioned at least six months in advance because documentation and collateral requirements take time,” Parashar noted. He added that early approval helps avoid last-minute financial stress.
During the programme, experts also advised simplifying investment portfolios and maintaining disciplined investing habits, particularly for long-term goals.
Concluding the discussion, Bhatt cautioned investors against reacting to market noise. “Investing is a personal journey. Every individual has different goals and risk appetite. When there is too much noise, focus on your own objectives and stay invested,” he said.
(Disclaimer: This article is only for educational purposes, not investment advice. Do your own due diligence or consult an expert for financial planning.)
