Sliding rupee puts the squeeze on Indian students in U.S.

Updated on: Tuesday, November 22, 2011

A section of students who left for further studies in the United States to join the ‘Fall' semester in August this year are contemplating completing their studies within three semesters instead of four. The reason: loan amount (in rupees) borrowed from Indian banks has increased with the depreciating value of rupee against the dollar.

The students said they were worried about how to raise more money than what they had calculated to pay for the next semesters. Bank officials, meanwhile, said students would have to raise the extra amount from their sources.

“For the $10,000-odd amount that I have to pay in fees for the next (Spring) semester, this increase of Rs. 5 adds another Rs.50, 000 to what I had paid for the Fall 2011 term. This 10 per cent increase in the conversion rate between dollar and the rupee pinches,” said Nishanth Coontoor, a Bangalore-based student studying in an American university, adding that many students had not expected the dollar-rupee conversion rate to reach Rs. 50.

Ajay Shivaramaiah, another student from Bangalore in the U.S., said some students were under increasing pressure because of the amount of money involved. “Usually everyone would take four semesters to finish their course work. Now they might think of finishing the course work within three semesters.”

“A Rs.5 increase might seem marginal, but when you try computing the money that is involved, it really is a significant amount,” Mr. Coontoor said. With living expenses coming at a minimum of $400 (Rs. 20,000) a month, the students said the additional Rs. 50,000 could have been used to manage expenses for over two months.

Other than the interest to be paid on the additional Rs.50, 000, the upfront amount to be paid to get a new loan has also increased. “This means that I have to put in additional loan money myself to get the loan in the first place. There is also an upper limit that every bank gives on the loan amount that can be availed. This is also affected,” Mr. Coontoor said.

Canara Bank General Manager Mythili Krishnamurthy said the hike in the dollar value from Rs. 45 to Rs. 50 within a very short time (a month) would hit everyone with a commitment in dollars, especially students, who would have to somehow get the additional amount themselves.

Sliding rupee puts the squeeze on Indian students in U.S.

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