Attract International Students- Price Guarantee

Here’s a technique colleges can implement to ensure more International Students choose them over their competition. Every year, nearly 5 million students go abroad to receive higher education. The number of international students in the world has risen to 5 million in just over a decade, between 1990 and 2014. The numbers are expected to grow even further to reach about 8 million by 2025. A number of factors continue to have impact on international student mobility in 2018. The ever changing dynamics of international politics, volatile economic conditions in the home country as well as in the host countries and the evolving needs of the labor market for different skillsets are among the most popularly acknowledged factors that affect decisions of students seeking education abroad. However, an oft overlooked dimension also exists that higher educational institutions need to pay greater attention to. This aspect happens to be the fluctuations in currency exchange and its effect on flow of international students around the globe.

 

Impact of Currency Exchange Fluctuations on International Students

 

It must be borne in mind that the demographic makeup of international candidates is already undergoing a significant shift, with more and more students opting for countries other than those considered the top preferences, like USA and Canada. While the latter is still popular among students from foreign countries, USA has been witnessing a dip in the number of students applying from beyond its borders. Many international students are now preferring to go for the more cost effective or affordable locations for getting higher education, including Asian countries like China and ones in UK like Germany and New Zealand.

 

The changes in the political scenario in the USA is not the only reason for this change in international student mobility paradigm. Indeed a growing wave of conservatism and anti-immigrant, right wing environment has contributed to students from third world countries looking for greener and safer pastures elsewhere. However, there are other reasons at play, and the fluctuation of currency exchange rates is definitely one of them. In recent times, we have seen the change in valuation of a number of currencies with respect to the US Dollar. Not all countries’ foreign-bound students have been affected by the same degree though. Here’s some statistics to illustrate how currency exchange fluctuations influence international student mobility. The following table shows the changes in the effective tuition rates for students in the top 10 source countries over 2015-16:

 

Source country
Tuition Rate change (in US $)
Brazil
-1747
Mexico
+6593
Canada
-355
Saudi Arabia
-307
India
+2103
Taiwan
+166
Japan
-9021
Vietnam
+6593
China
+3724
South Korea
-1839

 

The table above shows that while for some countries the prices rose, the cost of education in other nations has been going up. However, not every economy suffers the brunt of currency devaluation in the same extent. The level of impact that currency fluctuation has on international students depends on the relative spending power of the people in that country. For Chinese students looking to study in foreign countries, the average rise of tuition fees by 3724 US$ is not that big a deal because of their increasing purchasing power in recent years. China is indeed the biggest sender of international students every year, but the story doesn’t end there. There are students from other countries like India who also flock to countries abroad for higher education. In fact, India has emerged as the second biggest source of international students in the world. Indian students are affected very strongly by the currency exchange fluctuations. Much like the students of India, the students from Mexico also struggle to manage their academic expenses due to devaluation of their currency vis a vis the USD.

Case: The Cost of International Education for Indian Students

 

As seen from the table presented earlier, there has been a huge increase in higher education tuition costs for Indian students abroad. Undergraduate and graduate courses in the US have become dearer by nearly 3 lakhs in the last 5 months alone, riding on the back of the rapidly sliding Indian rupee. The fall of the Indian rupee has been spectacular indeed, with its value dropping to 72 as against the US dollar by September of 2018 and is slated to fall even further according to industry reports.

 

INR to US Dollar

Indian Dollar VS USD 2018

 

As a result, the cost of higher education for Indian students in international countries like the US is likely to become prohibitively high. Let us consider the case of Manish, who wants to study a masters course in economics in the the USA. Due to the falling value of the rupee, Manish’s parents are in a fix – in order to pay for the course fee of $30,000, they have to dole out extra cash and the burden seems to be never-ending. When Manish’s parents had gotten him enrolled, the rupee was at 64, then it quickly bounced to 67 and currently it stands at 74 with respect to 1 USD. The international colleges that are keen on recruiting students from India have to take this extreme fluctuation into consideration. They can make the life of international students easier by making their course fees more flexible depending on the current currency exchange value. The colleges can consider introducing some price discount strategies that will ensure that their student attraction and retention remains strong.

 

What Colleges Can Do to Insulate International Students from Exchange Rate Mayhem

 

The US colleges, where the number of Indian students have doubled in the period between 2007 and 2017, should consider giving price discounts to international students from India. This will allow the students like Manish to continue their education without having to drop out in the middle or get engaged in illegal or excessively time consuming additional work during their study in the US colleges. The colleges not only want to attract international students but they also want them to perform well in all academic and extracurricular activities so that their alumni becomes the greatest marketable asset to prospective students in the future. This can only be possible when the unnecessary burden of having to cope up with falling Rupee value against the US Dollar is taken away from their shoulders through strategic price discounting measures. The students who perform particularly well in their academics can be given greater discounts. This seems to be a more actionable and robust approach for international colleges to follow than just to provide opportunities of earning some cash through assistantships or part time lecturerships. These opportunities are anyway only available to students enrolled in the graduate courses and not those in the undergrad courses.

 

This arrangement also does not seem to have any major adverse effect on the financial standings of the colleges interested in recruiting international students. Let us look more closely at the numbers game to push home the point. Say an institution ABC based in the USA has an intake capacity of 20% international students in their various courses. International students pay the highest rate among the three different categories of students enrolled at any university, namely in-state, out-state and international. A typical breakdown of the tuition costs would be as follows:

 

In-state students – 2000$
Out-state students – 5000$
International students – 20,000$

 

So, in this hypothetical but representative college, the international students pay nearly 10 times as much as the in-state students and 4 times the out-state students. It is hardly a surprise then that most colleges want to hire international students. While it is true that there are some costs associated with incorporating a foreign student, most of the cost from finding proper accommodation to paying the tuition fees is usually borne by the student, especially at the undergraduate levels. So by giving a discount equivalent to the rate of devaluation of the currency in question, the college would still be able to skim away a hefty profit, in the tune of 15%. On the other hand, the students like Manish and his parents will be able to breathe easier. Ideally, instead of responding to each and every currency devaluation, the colleges should set the tuition prices for Indian (and indeed those of other countries) students at their domestic currencies, i.e. in this case, the INR. This would insulate the students keenly interested in pursuing degrees from US or other international colleges from any major fluctuations in currency exchange rates.

 

The Road Ahead for International Colleges

 

The flattening of tuition prices will come as a great relief for international students. It may also help higher educational institutions around the world to set themselves apart, as a sort of differentiating factor. It will make these colleges appear more sensitive to international student community, an aspect which actually ranks pretty high in the checklist of foreign students when deciding upon their colleges of preference. The institutes and universities that end up offering this protection against currency exchange variations may well attract more students from countries like India and Mexico where the cost of education is a big deal even as they are very interested in pursuing studies abroad. Moreover, these countries also offer some of the most meritorious students from all over the world, which is why it makes it makes economic sense at a holistic level in the long run as well for the colleges to show more tuition rate sensitivity.

Is your college developing a strategy to attract Indian Students? Get in touch with our international admissions experts who can help your college come up with a strategy that understands the Indian Student mindset. Drop in a mail at [email protected] and schedule a free one-on-one skype session. Learn more about are services for International Colleges by clicking here. 

Summary
Attract International Students- Price Guarantee
Article Name
Attract International Students- Price Guarantee
Description
Attract international Students to your campus and beat the competition by offering protection against currency fluctuation. A major concern for most international students.
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IOS Ignite
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October - 10,2018 | Posted by: Iosignite

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