The steady depreciation of the Indian rupee against the US dollar over the past few months has put financial pressure on students who are either planning to study overseas or are already pursuing their education abroad.
Bloomberg data shows that in the last six months, the rupee has fallen nearly 4 percent, weakening from Rs 83.75 per USD in August 2024 to Rs 86.95 per USD as of February 18, 2025. The rupee had even dropped to 87.9563 per dollar on February 10 before making a partial recovery.
Impact of Rupee Depreciation
The falling value of the rupee translates to higher expenses for Indian students studying in foreign countries, as tuition fees, accommodation, and daily living costs all become more expensive. “Even a slight fluctuation can inflate their annual expenses by lakhs, making budgeting a daunting task,” explains Sudarshan Motwani, Founder and CEO of BookMyForex.com.
Eela Dubey, Co-founder of EduFund, emphasizes the hidden financial burden that currency depreciation imposes. “Rupee depreciation acts as hidden inflation for Indian students aspiring to study abroad, significantly increasing the cost of education, even if universities do not raise tuition fees.” This means that even if a university maintains its tuition fees in USD, Indian students still pay more in INR because of currency fluctuations.
For example, over the last four years, the tuition fee for an MBA at NYU Stern has risen by 3.53 percent annually in USD terms. However, for Indian students, the real increase is 6.79 percent per annum when adjusted for the rupee’s depreciation—almost twice the inflation rate in INR.
“Rupee depreciation has far-reaching consequences, affecting not just tuition fees but also everyday expenses like groceries, travel, and accommodation, which are all increasing in cost,” says Rahul Subramaniam, Co-Founder of Athena Education.
Prashant Bhonsle, Founder and CEO of Kuhoo Edufintech, highlights another financial challenge. “The unpredictability of currency fluctuations makes it difficult for students and parents to budget for foreign education, worsening the challenge of financing. Furthermore, a weakening rupee leads to increased costs and higher debt burden, disproportionately affecting middle-class families,” he states.
Ways to Mitigate Rupee Depreciation
To better manage their finances abroad, students should adopt a three-pronged approach—using forex cards for daily spending, wire transfers for tuition payments, and keeping an emergency cash reserve, advises Motwani. Forex prepaid cards, loaded at a fixed exchange rate, help protect against rupee depreciation. For example, if a student loads a forex card at Rs 86.75 per USD, it shields them from potential losses if the rupee weakens further to 87.47 per USD.
In addition, forex cards eliminate foreign transaction fees and Dynamic Currency Conversion (DCC) charges, making them a more cost-effective alternative to INR-denominated credit or debit cards, which are subject to exchange rate fluctuations.
Traditional banks and money changers often impose hefty mark-ups of 2 to 8 percent. Therefore, opting for zero-markup forex services can save students significant amounts.
Motwani also advises students to open a local bank account in their host country for better financial management. Meanwhile, parents who are financially savvy can hedge against currency fluctuations by using forward contracts to reduce potential losses.
To further cut costs, Subramaniam suggests students reduce discretionary spending and consider shared housing. He also points out that working part-time can help students supplement their income. “Many international students already adopt this strategy, taking on part-time work, internships, or teaching assistant roles to supplement their finances while studying abroad,” he explains.
By adopting these financial strategies, students can navigate international expenses with more confidence and efficiency.
Hedging Against Rupee Volatility
Experts suggest that a well-rounded financial plan for studying abroad should include investments, education loans, and scholarships.
One way to hedge against currency fluctuations is by investing in USD-denominated assets, notes Dubey. For individual investors, passive US ETFs offer a simple and effective method to counter exchange rate risks while keeping pace with education inflation.
For those who prefer to invest in Indian markets due to limited capital or tax considerations, diversified equity mutual funds with strong long-term growth potential can help offset both rupee depreciation and rising education costs.
Although exploring external financing options like loans and scholarships is advisable, Dubey warns against relying entirely on them, stressing the importance of personal savings as a financial cushion.
“Choosing lenders with lower interest rates, flexible repayment options, and customized loan structures can significantly reduce financial strain,” Bhonsle adds.
A Weak Rupee Benefits Students Working Abroad
While a depreciating rupee creates challenges for Indian students studying abroad, it can actually be advantageous for those who secure jobs in countries with stronger currencies like the US, UK, or Europe.
“A weaker rupee actually works in favor of students working abroad, making their loan repayments more manageable due to the currency advantage,” says Bhonsle. However, he cautions that careful planning is necessary to maximize this benefit.
Despite the financial pressures caused by a weakening rupee, Indian students can minimize its impact through smart planning, diversified financial management, and strategic choices regarding study destinations.