By Mr. Sanjay Laul, Founder at MSM Grad
The rupee has depreciated from 70 to the dollar in 2021 to 92 in 2026. No university raised its tuition by that amount. The exchange rate did it for them.
When a family sits down to plan a study abroad budget, they usually start with the university’s fee structure. That number is visible, published, and easy to compare.
What does not appear in any brochure is the exchange rate. And in 2026, the exchange rate has become one of the most consequential variables in the entire financial plan.
The rupee’s decline against major currencies is not new. What is new is the scale. When the exchange rate was 73 to the dollar in 2021, a $40,000 yearly US master’s program cost about 29 lakh rupees. At a rate of 92 to the dollar, the same program at the same university will cost about 37 lakh rupees in 2026 without any tuition increases. That is an increase of 8 lakh rupees that was solely caused by currency fluctuations. Not by the university. Not due to inflation. just based on the exchange rate.
This is what experts call hidden inflation. The price did not change. The cost did.
The currency gap across destinations
The depreciation of the rupee varies depending on the destination. Every pair of currencies conveys a unique tale.
Since 2021, the rupee has lost about 20% of its value in relation to the US currency. In comparison to what the same money would have covered four years ago, this increases the annual cost of a $50,000 US program by about 7.5 lakh rupees.
The pound sterling has followed a similar pattern. UK maintenance requirements now stand at 1,529 pounds per month in London and 1,171 pounds per month outside London for nine months, figures that convert to significantly higher rupee amounts than when students made their original financial projections.
The Australian dollar and the Canadian dollar have both strengthened against the rupee over the same period. Students who budgeted for Australia or Canada two years ago and are only arriving now are working from figures that are no longer accurate.
The euro has been comparatively more stable, for students targeting Germany. A monthly living cost of 850 to 1,000 euros converts to approximately 78,000 to 92,000 rupees at current rates. That figure has moved less sharply than its dollar or pound equivalent. For cost-sensitive families, the euro’s relative stability is a concrete financial argument for European destinations.
The problem with loans fixed in rupees
Most Indian education loans are sanctioned in rupees. The disbursement happens in rupees. The repayment happens in rupees.
The tuition is billed in dollars, pounds, or euros.
This creates a structural mismatch. A loan sanctioned for 50 lakh rupees at a certain exchange rate may cover the first year’s expenses comfortably. If the rupee depreciates by 5% before the second year’s fees are due, the same 50 lakh covers less. The student has not spent recklessly. The currency moved.
On average, families underestimate this mismatch by 10% to 20%. Financial strain in the middle of the course results in top-up loans, family moves, or living expense reductions that have an impact on academic achievement and well-being.
The fix is specific. Budget with a 15 to 20% currency buffer built in from the start. Not as a contingency fund for lifestyle. As a structural assumption about the exchange rate environment, you are entering.
The counter-argument that most families miss
Currency depreciation hurts on the way in. It helps on the way out.
A student who graduates from a US or UK university and earns in dollars or pounds is repaying a rupee-denominated loan with a currency advantage. A salary of $80,000 converts to approximately 74 lakh rupees at current rates. That same salary converted at 2021 rates would have been 56 lakh rupees.
The loan repayment calculation changes entirely when the earnings are in a stronger currency. A weaker rupee inflates the cost of the degree. It also inflates the rupee value of the foreign salary used to repay it.
This does not make the currency risk disappear. It means the risk is front-loaded during study and the benefit is back-loaded during repayment. Students who stay and earn abroad for two to three years post-graduation are in a structurally better repayment position than those who return to India immediately. The currency works differently depending on which side of graduation you are on.
What smart currency planning actually looks like
Three practical adjustments change the financial picture significantly.
The first is timing large transfers. Tuition fees paid in one lump sum at an unfavorable exchange rate cost more than fees paid in smaller tranches timed around rate movements. Forex cards allow students to lock in a rate in advance for daily spending, removing the unpredictability of daily conversion costs.
The second is building a foreign currency reserve before departure. Keeping three months of living expenses in the destination currency, held separately from the main education budget, absorbs sudden depreciation without disrupting the core plan.
The third is choosing the destination with currency volatility in mind. Germany and Ireland, both priced in euros, offer more exchange rate predictability for Indian families than dollar or pound-denominated destinations. That stability has a financial value that does not appear in any cost comparison table but shows up clearly in end-of-year budget reviews.
The number to update before anything else
Every study abroad financial plan made before 2024 is working from an outdated exchange rate.
Revisit the numbers. Rebuild the budget at current rates. Add the 15% buffer. Then decide.
The university’s fees did not change. Everything around them did.