The Hidden Costs of Studying Abroad: Is it really worth the investment?

By Aman Singh

If you’re an Indian student planning to study abroad, you’re not alone. Thousands of students each year take the plunge, hoping for better career prospects and a brighter future.

But let’s be honest — it’s not just a dream, it’s a major financial commitment. Your parents are likely dipping into their savings, and you may be relying on student loans to cover tuition and living expenses.

In 2024, over 13 lakh Indian students were studying abroad, with many in the US, where tuition fees continue to climb. The question you need to ask yourself is: will this investment actually pay off? Understanding Return on Investment (ROI) in education is key to making sure this journey doesn’t end up costing more than you bargained for.

What ROI in Education Means and Why It Matters

ROI in education is not just about the amount you’ll earn post-graduation versus the cost of your education. It’s about weighing all the factors that make up the cost and the factors that will affect your long-term success.

For example, the US is a popular destination for Indian students, with over 3.3 lakh students enrolled in American universities in 2024. While the US offers top-tier education, it also comes with high tuition costs, especially for graduate programs.

College tuition fees in the US can range from ₹15 lakh to ₹60 lakh per year, and that’s before factoring in the cost of living, health insurance, and textbooks. As per the College Board, tuition fees have been rising steadily, with a 2-4% increase in the past few years alone. Is it worth it? Well, that depends on the ROI you expect from the degree you’re pursuing.

Transparency Issues That Affect ROI Calculation

One of the biggest challenges students face when calculating ROI is the lack of transparency from universities. While universities provide basic information on tuition fees, scholarships, and course offerings, essential details on outcomes like graduation rates, career progression, and salary expectations are often missing or hard to access.

Many students report struggling to find reliable information about the true costs of their education, such as additional fees or how their chosen program aligns with future job prospects.

According to a recent report Graduate Degrees: Risky and Unequal Paths to the Top by Georgetown University’s Centre on Education and the Workforce much greater transparency and accountability is required to minimize financial risks as “Over 41% of master’s degrees and 67% of professional degree programs in the US” may not be worth spending on in terms of ROI.

How Should Indian Students Calculate ROI?

So, how should you calculate ROI for your education abroad?

Understand the Total Cost

Start by understanding all the costs involved. Yes, this means tuition fees, but also the living expenses, travel and visa costs, healthcare and even unforeseen expenditures. If you’re planning to take out a loan, factor in interest rates and the repayment period, which will affect how much you end up paying in the long run.

Account for Opportunity Costs

If you are leaving a job to pursue education, factor in the income forgone. This will impact your overall return on investment.

Research Career Outcomes and Starting Salaries

Look beyond general rankings. Search for specific career outcomes related to your field. In the U.S., STEM graduates report higher starting salaries. According to Georgetown University’s Centre on Education and the Workforce, “those with a bachelor’s degree in architecture and engineering have median lifetime earnings of $3.8 million, well above the median of $3.2 million for all master’s degree holders” These salaries vary by region and sector, so make sure to narrow down your research.

Evaluate Post-Graduation Work Opportunities

Many countries offer work visas post-graduation. In the U.S., international students on an F-1 visa can apply for a 12-month Optional Practical Training (OPT) period, with a 24-month extension for STEM graduates. This is critical for assessing ROI as it impacts the ability to work and earn abroad.

Assess Support Systems and Graduation Rates

If you’re a first-generation college student without connections in the country you’ll be studying in, you’ll need a strong support system from your university. The graduation rates of the program you choose, as well as alumni success stories, can provide important insights into the program’s effectiveness and the likelihood of you completing it successfully

Consider Long-Term Career Benefits

Networking opportunities can offer long-term career benefits. Studying abroad offers students rich experiences, diverse perspectives, and invaluable international networks, all of which can influence their future careers. Although these aspects are harder to quantify, they hold immense significance and often form the foundation for long-term success.

Make the Right Choice to Make Your Investment Count

Studying abroad can open doors to incredible opportunities, but it’s not without its challenges. To ensure that the financial burden doesn’t outweigh the benefits, take the time to research your options thoroughly. Don’t settle for vague promises—demand data on graduation rates, career outcomes, and alumni success to help you make the right choice.

In the end, education is more than just an investment in your career; it’s an investment in your future. The dream of studying abroad can be a reality, but only if it’s backed by a clear, calculated ROI.

(Author is Co-founder of GradRight)

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