According to the latest report from the British High Commission, there has been a remarkable surge in the number of student visa applications received from India. The data shows that from September 2021 to 2022, over 127,000 student visas were granted to Indian students, marking a staggering increase of 273% as compared to the same period in 2018-2019. The United Kingdom has always been an attractive destination for Indian Students seeking higher education, the recent policy changes made it more accessible, coupled with the pent up demand from the COVID-19 Pandemic, this resulted in a drastic increase in the number of student visa applications. As a result, the UK has emerged as a popular choice for Indian students. As per the National Indian Students and Alumni Union (NISAU), the umbrella body of Indian and India-related societies at various universities across the UK, there are currently around 500,000 students from India in the UK alone.
However, the process of obtaining a student visa is not without its challenges. The filtration process is extensive and can have a monetary impact on those applying for international education. Those who are successful in obtaining a visa may face financial difficulties, as a result of a lack of awareness about alternative options.
Challenges related to budgeting, expense management, and digital payments are common among international students. The costs of commodities can vary greatly between countries, making it difficult to manage finances without proper precautions. The appropriate starting point, however, for any such budget plan would be the application fees that need to be paid, and once an offer is received from a university, a deposit must be paid to secure a place. International students studying in the UK usually incur higher tuition costs compared to domestic students. While traditional banks claim to offer zero-percent forex conversions, there may still be hidden fees involved in the process. These charges can add up over time and significantly impact a student’s budget. Apart from these costs, students must also account for other expenses such as accommodation, food, transportation, and study materials, which can accumulate and lead to a considerable financial strain.
The gap between the financial needs of international students and the available options for managing their finances is easily bridged through the implementation of technology. The entry of FinTech companies, the digitization of financial services, and the growth of neo-banking platforms have made it easier for students to access and manage their funds while studying abroad. The penetration of the cross-border Unified Payments Interface (UPI) has made it easier for students to transfer funds to and from their home country. With these advancements, international students now have more options to manage their finances, making the process of studying abroad less daunting.
The early days of the aspiration, the application phase:
FinTech companies have made it easier for international students to manage their finances, specifically in the area of cross-border payments. Numerous students opt to borrow money to finance their expenses while studying abroad. When these funds are remitted overseas for tuition fees and other expenditures, they are subject to steep currency conversion fees. This can result in unforeseen expenses that can be difficult to manage due to a lack of awareness. With the emergence of neo banks and other digital platforms, students have more options to transfer funds across borders at a lower cost. Students need to research and utilize these alternatives before starting the process of studying abroad to save money effectively. By having the most suitable solution in place, students can avoid additional expenses that can add up throughout the process.
Post acceptance days, pre-Visa & post- Visa, pre-travel phase:
.For international students, effective planning is fundamental to manage expenses and avoid potential issues. It requires careful budgeting that considers even unlikely situations and prepares accordingly, taking into account the exchange rate’s potential impact on expenses. However, currency exchange rates are volatile, making it difficult to determine the optimal time for currency conversion. Hence, it is advisable to focus on safeguarding against currency price increases rather than speculating. It is crucial to note that currency conversion should primarily serve practical purposes rather than investment objectives.
To achieve this, it is important to create a comprehensive budget plan covering all possible expenses, including accommodation, food, transportation, study materials, and leisure activities. It is also essential to monitor currency fluctuations and set alerts for specific amounts to ensure that currency is exchanged at the most favorable rate, understand the charges associated with currency conversion, and explore cost-effective options such as online transfer services or prepaid forex cards. Opening a local bank account, researching scholarship and grant opportunities, and being aware of financial policies can help international students reduce the financial burden.
Another effective strategy is to reach out to student unions and organizations that assist international students well in advance. This helps speed up the process of making living arrangements and other preparations that are typically done upon arrival. Additionally, their guidance and assistance during the settling-in process can help avoid unnecessary expenses and assist with tasks such as figuring out daily modes of transportation and finding the best spots for shopping.
Moving abroad & Settling in, Post-Travel Phase:
When using credit cards or INR-denominated cards for international transactions, or other digital means that involve currency conversion charges, the issue of high conversion charges can arise. In such cases, individuals must have researched and finalized the most suitable payment sources that do not charge excessive rates. To elude incurring high conversion charges, it is important to avoid using traditional methods for remitting payments abroad during the early days of settling in. By being mindful of these costs, it is possible to save 3-4% of total expenditure.
During the initial days, every transaction made from accounts based in India incurs a forex cost, even if the funds have been withdrawn and converted in advance. To avoid these high and unfeasible charges, one solution is to obtain a part-time job. Not only does this provide an additional source of income, but it also offers a valuable experience of the foreign culture and the differences in working in a different country. A part-time job can help avoid forex charges that would be incurred if the money was remitted from the home country. Part-time jobs can help individuals save about 25% of their expenditures, protect them against currency fluctuations, and make paying off loans easier.
Challenges that can be encountered in the post-settling-in phase:
Managing unexpected expenses can be daunting, but there are ways to mitigate the financial burden associated with it. Indian students can reach out to the student union or community in their respective universities to raise the funds they need in their own currency, making the payoff and acceptance of the funds forex-free. This approach can save students money and provide them with the necessary support to manage their finances better.
As international students settle into the host country and establish a steady source of income, many may want to send a portion of their earnings back to their home country. Traditional methods of remitting funds are costly due to charges imposed on both inbound and outbound transactions. Neo banks have emerged as an alternative solution to this problem. With their focus on digital banking, neo banks offer a range of services that traditional banks do not. One such service is the use of forex cards. When sending money abroad using a forex card from a neo bank, international students can avoid the high fees typically associated with traditional banks. Forex cards offer competitive exchange rates, making it possible for students to send more money home without incurring additional costs.
It is crucial to have a financial plan that includes an emergency fund to cover unforeseen expenses and prevent incurring debt or dipping into long-term savings, especially in today’s uncertain world. An effective way to establish an emergency fund is by opening a cross-border neo-bank account. Neo-banks offer various advantages such as low fees, high-interest rates, and a diverse range of financial products and services, contributing to maintaining financial stability. Neo-banks do not charge forex exchange fees, resulting in cost savings when withdrawing money in a foreign currency. By relying on the emergency fund in a neo-bank account instead of seeking financial assistance from family or friends, one can become self-sufficient, reducing stress and uncertainty during difficult times.
Disclaimer
Views expressed above are the author’s own.
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