Fewer Indian students look to US universities

NEW DELHI — After being ranked first in the Master of Science program in 2006 at her college in India’s Osmania University, K. Archana took the Graduate Record Examination in May 2007 to apply for admission to an American university. She was accepted by the University of Alabama in Huntsville and Long Island University. A year later, while preparing her documentation for her visa, she suddenly decided to shelve plans to go to the United States.

"I would have had to take 17-20 lakhs of rupees (about $35,000 to $41,000) which is a huge amount to think of taking a chance with, because there is a job crunch," Archana said.

U.S. universities looking to foreign students for cash in these days of sagging endowments are going to be hit hard by the absence of students like Archana next year. The reason: the economic downturn has dented job prospects, sent the Indian rupee plunging against the dollar making U.S. tuitions more expensive, and increased the difficulty of obtaining educational loans, prompting more and more Indian students to stay home.

The stakes are high. Last year, of the more than 120,000 Indian students who went abroad for higher education, the United States took in a giant share of 94,563 students, a record number. Education counselors here said that almost 90 percent of those students took educational loans.

"The number of Indian students going abroad will definitely go down," Jaideep Chowdhary, public relations head at Hyderabad city’s Time4Education, a counseling services company, said confidently. "Logically one would say it’s a bad time to graduate now because job opportunities are down and it’s a good time to enter colleges. Unfortunately that’s not how we’ve seen students behaving," Chowdhary said.

Already there are signs that numbers of Indian students going to the United States look set to decline. Educational Testing Services, which conducts the Graduate Record Examination, said in a recent report that test-takers from India in 2008 are down to 55,000 from last year’s 74,000.

Many students willing to take the risk and go abroad to study are saying that since last September or October, banks — even the public ones that have been ordered by the government to increase educational lending — are using delaying tactics by demanding documents they never asked for before so they can turn down education loan requests under one pretext or another.

Because the Indian economy was doing so well until recently and because jobs were plentiful, higher education loans almost doubled in the four years preceding last March. Not any more. Students now have to go from bank to bank looking for one that will let them borrow, unlike earlier when it was much easier to get loans.

Recently a local newspaper quoted an official from a public bank here saying that the fall in banks’ education loans portfolio is because the number of defaults has already begun to increase. The official said that almost 25 percent of the non-performing assets at his branch alone are educational loans. "There is going to be a sub-prime (crisis) even in educational loans," the official added.

When contacted, many public banks’ officials either didn’t comment or didn’t return repeated phone calls. "In general all unsecured loans’ norms have been tightened in the past six months," said K.V.S. Manian, group head for liabilities at the private Kotak Mahindra bank, adding that his bank doesn’t "aggressively pursue educational loans."

Incidentally, Mr. Manian’s cell phone ring tone is an advertisement that says in Hindi, "If money grew on trees, your daughter would be studying in the U.S." and then goes on to say that Kotak Mahindra is a generous lender for education.

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