The return on funding for education from each of these countries will be determined by the student’s annual wage and projected growth in India.
Many students dream of studying abroad, but it is a difficult decision to make when investing lakhs of rupees. To make sense of the decision, it would be prudent to compare the return on investment over time. Based on four parameters, we compare three study destinations for Indian students: Canada, the United Kingdom, and Australia. The metrics include median earnings before and after the course, cost incurred (tuition fee, living expenses), opportunity cost (professionals who plan to pursue post-secondary studies after a few years of work sacrifice a portion of their yearly salary and experience), and student loan cost.
- UK
Ever since the announcement of the Graduate Immigration Route (GIR), which enables the students to stay in the country for two years, the return on investment in education from the UK has improved markedly. The new post-Brexit point-based immigration system has also resulted in a 43% increase in the number of Indians receiving skilled worker visas in 2021. Although the number of Indian students accepted for the visa cannot be ascertained, the numbers for Indian youth appear promising.
In terms of the financial investment required to study in the United Kingdom, the average cost of education for an Indian student is around Rs 30-35 lakhs for a postgraduate degree in computer science. Furthermore, living expenses for a month can range between Rs 1-1.5 lakhs, depending on the city. The overall investment to study in the UK would be around Rs 40 lakhs, for which a student would typically take a Rs 32-35 lakh education loan. After completing the course, the student can expect to earn an average salary of £26,351 to £41,454 (Rs 25 to 45 lakhs).
Even if the student did not earn prior to actually pursuing a master’s degree in the UK, the ROI in terms of salary, global experience, and growth 3 to 6 years later remains tremendous.
If the student earned Rs 5 lakhs per year in India, the ROI would be higher for STEM degrees, which are in high demand, with salaries starting at Rs 25 lakhs for entry-level jobs. So if the student is admitted to a university ranked between 250 and 500, the returns appear promising, as more than 143,000 jobs in the STEM field will be created by 2023. Whereas if a student’s salary ranged from Rs 15 lakhs to Rs 25 lakhs, the ROI would be negative because the opportunity cost would be significantly greater. The student will forego his yearly salary, on-the-job experience, and the resulting salary increase over the two years he will invest in pursuing the course. The university’s ranking will be meaningless because the student will only be looking for mid-level jobs after graduation.
- Canada
Due to the obvious longer post-study work visa and easy PR options, Canada is one of the most popular study destinations for international students. In Canada, the maximum stay-back period after completing a master’s degree in three years. A master’s degree in computer science typically costs between Rs 25 lakhs and Rs 30 lakhs in tuition. Furthermore, the annual cost of living is approximately Rs 8 lakhs. Students can expect their total expenditure (study + living) to be around Rs 46 lakhs, of which they generally borrow Rs 25-28 lakhs. Part-time jobs, where a student can work up to 40 hours per week and earn approximately 20 CAD per hour, can help cover the remaining expenditures.
The average annual salary after completing the course is 55,000 CAD (Rs 33 lakhs). To make a comparison of 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 at a university ranked between 251 and 500. If a student earns up to Rs 15 lakhs in India, the ROI will be positive and high if the student chooses a university ranked 50 to 100, as the opportunity cost, investment, and education loan will be less than the average salary after graduation. If the student earns up to Rs 25 lakhs in India, the ROI will be negative because the opportunity cost for the student, even from a top university, would be prohibitively expensive.
- Australia
After two years of strict COVID-19 protocols, the country recently opened its borders to international students. To attract international students, several arrangements are being implemented, including increased part-time working hours, visa fee rebates, and newer scholarship schemes (Australian Maitri Scholarship Program). A postgraduate student has a two-year stay-back period. A master’s degree in computer science typically costs 38,000 AUD per year (roughly Rs 23 lakhs). In Australia, the total cost of education is Rs 65-70 lakhs, including an annual cost of living of approximately Rs 12 lakhs.
To pay the expenses of education in Australia, an education loan amount of Rs 40 to 50 lakhs is usually required, with a student managing the remaining expenses with a part-time job (40 hours every fortnight) earning 19 AUD per hour. After MS, the average annual salary in CS is Rs 30-35 lakhs. To compare ROI, a student earning Rs 5 lakhs in India will receive positive and high returns on his education investment from Australia if he is admitted to one of the top 500 universities.
The return on investment in education from all of these places will be determined by the student’s current salary and growth prospects in India. Moreover, after analysing each country’s ROI for each salary bracket, Canada has a higher return on investment for students. When comparing the cost of a master’s degree in various countries, Canada’s investment in education is relatively low, with comparable starting salaries and a longer option to stay back in the country, and faster PR options.
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