How will the Predicted Recession Affect Study Abroad Aspirants ?

With the COVID-19 situation worsening in popular study abroad destinations such as the US, the UK, Australia, and Canada, it hasn’t been an easy ride for international students. Thousands of students have been forced to return home since the outbreak of coronavirus. International students from countries such as India, China, Germany, France, Middle East, South Korea, Brazil, and Japan are among the most affected.

According to the World Economic Forum’s (WEF’s) latest report, the US economy lost 701,000 jobs in March 2020. According to the Bureau of Labor Statistics, this was just the number of nonfarm payroll jobs. This was seven times more the number that had been predicted by expert economists.

In other parts of the world, governments are stepping in to pay people’s wages, to prevent companies from announcing layoffs. A few weeks ago, Rishi Sunak – the U.K.’s chancellor of the exchequer, made an announcement regarding grants. The announcement was that the government would offer grants covering 80% of the salary of retained workers, up to a total of 2,500 British Pounds per month. Around the same time, US President Donald Trump signed off a 2 trillion dollar stimulus package bill to help American citizens by sending out cheques of up to 1,200 US Dollars from the second week of April. Governments of nearly all countries are doing something or the other to support their citizens, and this is a great move. But this is a temporary move, and there is another catch to it. Since the government is using its own money – or rather citizen’s money – economies are bound to fall flat on their face. Most economies are already on the verge of decline, and a recession is evident. This recession is going to be perhaps the biggest ever – bigger than any recession we have witnessed during our lifetimes.

How Will the Recession Affect Study Abroad Aspirants?

The abroad education market has been hit the hardest due to recession. Enrolled students are worried about the completion of their course, while students who have recently enrolled are worried about delays in the process. At the receiving end of this situation are the study abroad aspirants who have no idea as to what shape their plans will take in the months to come.

However, a lot can be learned from the Great Recession that took place between 2007 and 2009. Major learning was that recession led to a rise in school and college intakes. According to L Dhanasekaran, head of Education UK, south India (during the year 2008), the number of applications from south Indian students for UK universities had doubled since the start of the recession.

The predicted recession will directly affect aspiring students in many ways. Let us look at a few major changes abroad education aspirants can expect if the recession takes place as predicted : 

1. Studies Will Become Expensive - This does not mean that colleges and universities will increase tuition fees. Universities might not raise fees at all. In fact, there might even be fee cuts. But the qualitative costs will be higher. Students will find it more difficult to pay their fees and repay their loans. This would be due to various factors that come as a result of economic declines. Property or collateral costs will go down. Parent’s salaries will also be cut, and some might even lose their jobs. This would make things more difficult - especially for international students who have to shell out more money for their education as compared to domestic students. The students’ ability to repay their education loan will reduce in some cases. The number of courses or intakes is not likely to go down though. This is because international students are a great source of revenue for all these universities; and without the former, even the universities will find it hard to recover financially. For now, many universities have delayed their application deadlines as well as their session start dates.
2. Long Term Study Goals Might Not Get Affected - The most impacted by this situation will be the ones who are graduating this year or the next. Even if the Coronavirus situation is completely dealt with by (ideally) June this year, things on the economic front might start getting better only by the end of this year. If the problem persists for a longer period of time, we might see the recession extend beyond 2021. Students who would enroll this year would graduate by 2022 or later. That is when they would be available for full-time employment. Practically speaking, the market should really open up by then, and bigger manpower may be required to reverse the economic decline as well. However, getting internships straightaway would be difficult if you enroll in Fall 2020 or Spring  2021 sessions.
3. Student Exchange Programs are Going To Emerge - Students and universities would benefit from the latter’s collaborations with other organizations and institutions. Such partnerships would support mobility among the students while providing them with quality education as well. Student exchange networks between institutions can provide funding as well as the promotion of student exchange. For example, Chevening – a prestigious international awards program run by the UK government – has helped over 50,000 professionals study in the UK. The program acknowledges the coronavirus situation and is still working on connecting with students online and through telephone.