Overseas education is a dream of many students but a tough decision to make when it comes to investing lakhs of rupees. It would be wise to compare the return on investment over the years to understand the decision. Here we compare three study destinations for Indian students, namely Canada, UK and Australia, based on four parameters.
The parameters include average income before and after taking the course, direct costs (tuition, living costs), opportunity costs (professionals who plan higher education after a few years of work, sacrifice the amount of annual salary and experience) and education loan costs .
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Here we select master computer science to facilitate the comparison.
UK
Returns on investment in education from the UK have improved significantly since the announcement of the Graduate Immigration Route (GIR), which allows students to stay in the country for two years. The new points-based immigration system, launched after Brexit, has also led to a 43 percent increase in the number of Indians receiving a skilled worker visa by 2021. While the number of Indian students approved for the visa cannot be determined , the numbers are looking promising for the Indian youth.
As for the investment required to study in the UK, the average cost of education for an Indian student is around Rs 30-35 lakhs for a postgraduate degree in computer science. In addition, the cost of living, although largely dependent on the city, can range from Rs 1-1.5 lakhs for a month. The total investment to study in the UK would be around Rs 40 lakhs for which a student usually takes a student loan of Rs 32-35 lakhs. The student can expect an average salary of £26,351 to £41,454 (Rs 25 to 45 lakhs) after the course.
Suppose the student didn’t earn before taking a master’s degree in the UK, then the ROI remains exponential in terms of salary, global experience and growth, 3 to 6 years later.
If the student in India were to earn a salary of Rs 5 lakhs per year, the ROI would be greater for STEM degrees which are in high demand with salaries for even entry-level jobs starting at Rs 25 lakhs. The return looks promising even if the student is admitted to a university that falls in the 250-500 rank, as more than 143,000 jobs will be created in the STEM field by 2023.
If the student were to earn a salary of Rs 15 lakhs to 25 lakhs, the ROI would be negative as the opportunity cost will be higher. The student will sacrifice the annual salary, the experience gained on the job and the resulting salary increase during the two years that he will invest in taking the course. University rank will not matter as a post graduate student will only be looking for mid level jobs.
Canada
Canada is one of the preferred study destinations for foreign education due to its extended post-graduate work visa and easy PR options. The maximum period of residence after a master’s degree in Canada is 3 years. The average tuition for a masters degree in computer science is Rs 25 lakhs to 30 lakhs. Moreover, the annual cost of living is about Rs 8 lakhs. Students can expect the total expenses (study + housing) to be around Rs 46 lakhs, of which students typically take a student loan of Rs 25-28 lakhs. The remaining costs can be managed through part-time jobs, where a student can work up to 40 hours per week and earn about 20 CAD per hour. The average base salary upon completion of the course is 55,000 CAD (Rs 33 lakhs).
Now, to compare the ROI on education from Canada, if the student earns INR 5 lakhs in India, the ROI for the course will be positive and high even if the student ends up studying in a university ranking of 251 to 500.
If the student earns up to Rs 15 lakhs in India, the ROI will be positive and high if the student chooses university rank between 50 and 100 as the opportunity cost, investment and the education loan would be lower as compared to the average salary after to graduate.
If the student earns up to Rs 25 lakhs in India, the ROI will be negative as the opportunity cost to the student even from a top university would be extravagant.
Australia
The country recently opened its borders to international students after two years of strict COVID-19 protocols. Several provisions have been put in place to attract international students, including increasing part-time working hours, discounts on visa fees, and newer scholarship schemes (Australian Maitri Scholarship Program). The stay-back period for a postgraduate student is 2 years. The average annual cost of a master’s degree in computer science is 38,000 AUD (approximately Rs 23 lakhs). The total cost of education in Australia is Rs 65-70 lakhs which includes the annual living cost of about Rs 12 lakhs. To cover the cost of education in Australia, the amount of the education loan is usually up to Rs 40 to 50 lakhs with a student being able to manage the remaining costs with a part-time job (40 hours every two weeks) earning 19 AUD per hour. The average annual salary after MS in CS is Rs 30-35 lakhs.
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To compare the ROI, if a student earning Rs 5 lakhs in India will get a positive and high return on his education investment from Australia if he lands a place in the top 500 universities.
A student earning Rs 15-25 lakhs in India will not get a positive return on investment as the average salary after graduation does not offset the opportunity costs and EMIs for education loans.
The return on investment in education from each of these countries will depend on the current salary and growth prospects of the student in India. However, after analyzing each country’s ROI for each pay grade, Canada has a better return on investment for students. Comparing the investment in a master’s degree in different countries, the investment in education in Canada is relatively modest, with comparable starting salaries and a longer stay option.
— Written by Ankit Mehra, CEO and Founder, GyanDhan
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