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China and India are the two leading sources of international students coming to the U.S. As at November 2016, American universities and colleges enrolled over 202,000 students from India and 314,000 from China , according to the latest data released by the Student and Exchange Visitor Program (SEVP), part of U.S. Immigration and Customs Enforcement (ICE).
Any major shift in the number of students coming from these two countries can have serious implications for international enrollment at many American institutions. With the increase in concerns about the China slowdown, institutions have been banking on India as the next big source country to meet enrollment goals.
However, a recent change in the Government of India policy can negatively affect the growth of Indian students going abroad. On November 8, the Prime Minster of Indian announced a demonetization policy which made 86% of the currency in circulation invalid as a legal tender.
One of the key motivations for demonetization was to flush the black money generated through tax evasion and corruption and take India towards a “cashless economy.” However, cash was also the mechanism of short-term borrowing for many Indian students.
Visa approval processes for international students requires showing proof of availability of funds for the first year of tuition and living expenses. Given that total annual expenses can range from US$ 30,000 to US$ 70,000, many Indian students were using short-term borrowing for visa approvals and education abroad.
The timing of demonetization could not have been worse for many institutions who were still making sense of the implications of the American Presidential elections on international students. The deadlines of most institutions range from November to February creating further time pressure as there is a lot more uncertainty about the external environment.
Clearly, in this context demonetization is likely to affect the willingness and ability of Indian students to study abroad, however, the impact will differ by the level of education.
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