As Rupee Slides, Ivy League US B-schools now cost more than Rs 1 crore


To put the new Ford EcoSport’s Rs 5.59 lakh price in perspective, talk to someone who’s joining a two-year MBA program in the US this fall. In the two weeks that the Indian rupee slid from 57 to 60 against a US dollar, that is about how much more their impending educational expenditure increased by, just like that.

Between February and June 2013, the price of studying at INSEAD’s France campus has risen by Rs 4.72 lakh. During the same period, studying at London Business School has become dearer by Rs 7.81 lakh. Three FMS Delhi students could complete their MBA in that much.

The shock perhaps is the rudest for those who accepted admits to the MBA classes of 2015 in Europe or the US back in February 2013, when the rupee was 53 to a US dollar, and must now punch in the new rate of 60 into their calculations. But given how close their dates of flying abroad are, chances that they will backtrack now are bleak.

“As most students who plan to study abroad start their preparations many months before they finally fly, a sudden increase in the costs normally does not have a strong negative impact on their decision. Moreover, majority of them do want to take advantage of the admission to any good university and would not like to lose that opportunity and go through the same process again in future,” said Prashant Bhonsale, country manager of education loan provider Credila Financial Services.

However, the depreciating rupee might take the loan amounts required by some students from Indian sources beyond the banks’ allowable limit, forcing them back to the negotiation table with their lenders, or looking for alternate sources of funding. Those who are picking up a loan from foreign sources (such as the university’s own loan program), will not be affected, unless they plan to (or have to) return to India and pay off their loans by earning in rupees.

Vibha Kagzi, who owns the Mumbai-based admission consultancy ReachIvy argued that for people aiming for the top schools, the rupee devaluation is disappointing but a temporary blip at best. “They treat the MBA as a bigger investment at schools where the median salaries are upwards of $100,000” she said. “One probably needs to worry if they are attending lower-ranked schools after which a job abroad is less likely.”

Using the total expense estimates given by b-schools on their websites, studying the Wharton (University of Pennsylvania) two-year MBA comes out to be the most expensive, at Rs 1.16 crores. The expenses for seven more schools from the Financial Times Top 14 Rankings have crossed the Rs 1 crore mark.

For every point that the rupee further depreciates, returning to India before paying off the loan would be untenable by Rs 1.8 lakh more for a US MBA graduate. All this probably does not matter for someone who is resolute on finding a job abroad and paying off the loan or recovering the expenditure entirely using salaries earned in foreign currency. But the likelihood of finding a job varies from country to country. In the US, for example, median salaries at the top schools have been stably increasing and the job search is relatively less frustrating than that in Europe, where b-schools have been actively cautioning non-European applicants from pitting too much their hopes on getting a job in the continent. So while schools such as the ones in Spain extol the virtues of their increasingly global job recruitment patterns, the idea of returning to a job in Bangalore and finding the loan amount increased by Rs 5 lakh or more is not comforting.

As for applicants to the classes of 2016, expenses of planning and applying will increase from the word go. For example, taking the $250 Graduate Management Admission Test (GMAT), or submitting a $220 application at a top US b-school, has become dearer by around Rs 1,700 since February 2013. For those who plan on using admission consultants to improve their essays and interviewing skills, a typical one-hour session priced at $270 will cost more than Rs 16,200, higher by Rs 1,890.

Admission consultants in the US have not responded with pricing cuts to offset depreciating currencies in countries such as India, Brazil or China, each of which contribute a large number of applicants to American schools. Said Linda Abraham of Los Angeles based Accepted, “Frankly, since our costs are denominated in dollars and are determined by the US cost of living, we can’t give discounts when other currencies decline.” But availing discounts offered by the consultants, or using lower-priced local consultants, would perhaps be the most prudent thing applicants would do in order to cancel out the adverse effects of a sliding currency.


Currency Rupee value on Jun 27, 2013 Rupee value on Feb 2, 2013
1 US Dollar Rs 60.2 Rs 53.1975
1 Euro Rs 78.4839 Rs 72.5961
1 British Pound Rs 92.0647 Rs 84.1771
1 Hong Kong Dollar Rs 7.76 Rs 6.859

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