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How to fund a foreign degree

Studying abroad can lend an edge to your resume, but can you afford it? Know how to finance your dream.

The thirst for knowledge knows no bounds—and certainly no borders. But when it comes to expense, one is bound to run into a few hurdles. So, if you are preparing to acquire a higher education degree from a university based abroad, find out if you shall be able to bear the high expense of studying and living overseas. More importantly, be clear whether the degree will justify the high cost. Find answers to these and other frequently asked questions.

Where should I apply for higher studies and when should I start?
Before applying to institutions abroad, ask yourself: Am I academically prepared for the course? Will the foreign degree be recognised in India or other countries? Importantly, will I earn enough to justify the expensive education? Once you have found satisfactory answers, you can begin filling up the forms. Where you apply will depend on the course you want to pursue. The second consideration is the cost of education as well as living expenses.

Admission overseas is a longdrawn affair. In the case of the US, start six months before the commencement of the course. For the UK, the time period is 3-6 months. "Students prefer to apply to 6-8 universities, so be prepared to shell out $50-100 (Rs 2,200-4,400) for each admission form," says Vineet Gupta, managing director, Jamboree, a GMAT training institute.

How do I calculate my expenses?
Once you get through a college or university, you will know the exact tuition fee to be paid. Then comes the difficult task of calculating your monthly expense. The biggest chunk of your expenses will be taken by accommodation. Most students prefer off-campus accommodation, which, on an average, is cheaper by 20 per cent than the on-campus one. Also, you have the flexibility to have as many roommates as you want, cutting down on rental cost per person. However, take into account other considerations, such as transportation costs or the fact that you may have to pay for a Wi-Fi connection, which is usually free on the campus. For instance, in the UK, a room in the campus hostel will cost you about £100 (Rs 6,800) a week, whereas off-campus accommodation will be for £70-80 (Rs 4,760-5,440). However, a bus or travel pass will cost you £5-15 (Rs 340-1,020). Also, find out about other expenses, such as medical insurance, which is compulsory in most countries. "Students are now also considering more affordable countries like Germany, Italy and Japan, where the quality of education is as good," says Gupta.

How can I get a scholarship?
You can ask the institute for financial aid. If you have a high score, you'll have a good chance of getting a fellowship, which means your tuition fee will be waived. You can also apply for research assistanceship, where you will be assigned to work with a professor. In this case, about 70 per cent of your tuition fee will be waived and you will be paid a stipend. Many universities also run scholarship programmes. For this, you can check the announcements on the Website of the Ministry of Human Resource Development, www.education.nic.in. There are also trusts and foundations that offer scholarships. Most of these have deadlines between December and April.

Can I find a part-time job?
If you have a student visa, you will be allowed to work for up to 20 hours a week. Universities also provide oncampus jobs, say, in the library or cafeteria. In the US, the average salary is $8 (Rs 352) per hour for such jobs; in the UK, it is £5 (Rs 340).

Where can I get an education loan?
Though most public sector banks provide education loans, only a few do so for foreign studies. The interest rate varies from 9.5-14 per cent. Also, not all courses are eligible for a loan. So Syndicate Bank provides loans only for degree courses, not diplomas. If the loan is above Rs 4 lakh, you will have to provide a collateral or third-party guarantee. You can use life insurance policies, bonds, property papers, even National Savings Certificates, as collateral.

What if I have to extend my studies by a few months?
Though all education loans come with a moratorium, you can also avail of an extension. So while Punjab National Bank extends the period by two years if you are unable to complete the course on time, Allahabad Bank offers a second loan to cover the extra costs if the course is extended or costs escalate. Even if you can't repay the EMI, try to pay the interest as some banks give a concession of 1 per cent if you start repaying interest during the course.

How about colleges in India that offer degrees from foreign institutes?
Before joining such a college, make sure that both institutes have a sound reputation and award a recognised degree. Also, ensure there is an exchange programme, under which you get a chance to study overseas for about six months. But be careful as your tuition fee will not cover the cost of the programme and you will have to pay extra for it.

Education loan

  • Maximum amount: Rs 20 lakh.
  • Expenses covered: Air fare, all fees, purchase of books and equipment, such as a laptop.
  • Tenure: 5-7 years.
  • Repayment: One year after completing the course or six months after acquiring a job.
  • Security: None up to Rs 4 lakh, third-party guarantee for loans from Rs 4-7.5 lakh and tangible collateral for above Rs 7 lakh.
  • Tax concession: Rebate under Section 80E for the entire interest amount.
  • Documentation: Proof of admission, schedule of course expenses, income-tax assessment for the past two years and proof of income of co-borrower.