Overseas education is a dream of numerous students but a tough call to make when it comes to investing lakhs of rupees. It would be wise to compare the return on investment over the years to make sense of the decision. Here, we are comparing three study destinations for Indian students, namely Canada, the UK, and Australia, based on four parameters.

The parameters include average income before and after pursuing the course, direct cost (tuition fee, living expenses), opportunity cost (professionals who plan for higher education after a few years of work sacrifice the amount of yearly salary and experience), and education loan cost.

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Here, we are selecting master’s in computer science to make the comparison easier.

UK

The return on investment in education from the UK has improved significantly since the announcement of the Graduate Immigration Route (GIR), which allows students to stay back in the country for two years. The new point-based immigration system, launched post-Brexit, has also led to a 43 per cent increase in the number of Indians receiving skilled workers visas in 2021. While the number of Indian students approved for the visa cannot be determined, the numbers look promising for the Indian youth.

Coming to the investment required to study in the UK, the average cost of education for an Indian student is approximately Rs 30-35 lakhs for a postgraduate degree in computer science. In addition to this, the living expenses, while 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 amount to around Rs 40 lakhs, for which a student typically takes an education loan of Rs 32-35 lakhs. The student can expect to get an average salary of £26,351 to £41,454 (Rs 25 to 45 lakhs) after the course.

Supposing the student did not earn before pursuing a master’s in the UK, the ROI remains exponential in terms of the salary, global experience, and growth 3 to 6 years down the line.

If the student was earning a salary of Rs 5 lakhs per annum in India, the ROI would be greater for STEM degrees, which are in demand with salaries for even entry-level jobs starting at Rs 25 lakhs. The returns look promising even if the student is admitted to any university falling in the bracket of 250-500 rank as more than 143,000 jobs will be created in the STEM field by 2023.

If the student was earning 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 yearly salary, the experience received on the job, and the consequent increment in salary over the two years that he will invest in pursuing the course. The rank of the university will be of no significance as post-graduation, the student will be looking for mid-level jobs only.

Canada

Canada is one of the preferred study destinations for overseas education owing to the longer post-study work visa and easy PR options. The maximum stay-back period after a master’s in Canada is 3 years. The average tuition fee for a master’s degree in Computer Science is Rs 25 lakhs to 30 lakhs. Additionally, the annual cost of living is around Rs 8 lakhs. Students can expect the total expenditure (study + living) to be approximately Rs 46 lakhs, out of which students typically take an education loan of Rs 25-28 lakhs. The remaining expenses can be managed by part-time jobs, wherein a student can work up to 40 hours in a week earning approximately 20 CAD per hour. The average base salary after the completion of the course is 55,000 CAD (Rs 33 lakhs).

Now, to compare the ROI on education from Canada, if the student is earning 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 from 251 to 500.

If the student is earning up to Rs 15 lakhs in India, the ROI will be positive and high if the student opts for a university ranking between 50 to 100, as the opportunity cost, investment, and the education loan would be less compared to the average salary after graduation.

If the student is earning up to Rs 25 lakhs in India, the ROI will be negative as the opportunity cost for 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 are introduced to attract international students, including increasing the part-time working hours, visa fee rebates, 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 (roughly Rs 23 lakhs). The total cost of education in Australia is Rs 65-70 lakhs, including the annual cost of living of approximately Rs 12 lakhs. To cover the cost of education in Australia, the education loan amount usually runs up to Rs 40 to 50 lakhs, wherein a student can manage the remaining expenses with a part-time job (40 hours every fortnight) 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 positive and high returns on his investment in education from Australia if he secures a seat in the top 500 universities.

A student earning Rs 15-25 lakhs in India will not get any positive returns on investment as the average salary after graduation will not compensate for the opportunity cost and education loan EMIs.

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 the ROI of each country for every salary slab, Canada has a better return on investment for students. After comparing the investment in a master’s degree in various countries, investment in education in Canada is relatively moderate, with similar starting salaries and a longer stay-back option.

— Authored by Ankit Mehra, CEO and Founder, GyanDhan

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