Economists worldwide are debating the effects of the global economic slowdown. Experts suggest that we are on the brink of a recession. In fact, as per reports, the USentered the phase of recession in the summer of 2022. There are many indicators of this. For example, the US Trade deficit narrowed to its lowest of the year, in August. Wallstreet plunged and has been unsteady since 2021 leaving investors in jeopardy.
Reports suggest that 39 per cent of the companies in the country have implemented a hiring freeze and 46 per cent are planning to downsize. Additionally, the mortgage rates have gone up significantly, and have almost doubled as compared to its rates in 2021. These developments have specific implications for Indian students already in the US or those planning to go next year. .
Hike in tuition fees
Several universities in the US have hiked up their tuition fees. For example, Seattle University and Syracuse University recently increased their tuition fees by 3.75 per cent and 4.5 per cent respectively. Even premier universities have not been able to avoid this hike. Reports suggest that for a four-year undergraduate course, the fees went up to $84,413 in 2022 compared to $82,178 in 2021.
Cost of accommodation
In addition to the increase in tuition fees, the higher cost of living in the country has added to the students’ woes The cost of the mortgage alone has increased by a significant amount. The effect is compounded by the inflation characteristic of the current economy.
There has been a rise in the cost of utilities and essentials that are needed to sustain oneself. This includes travel, food, heating and electricity, and even clothes. The rate of these supplies and mortgage costs vary from state to state, but the general trend is that living in the US has become more expensive.
Pursuing a a degree in the US is an investment. It is advised that students calculate the returns they expect before making that investment. This is usually based on the job opportunities that are expected to open up for them after completing the course. However, estimates suggest that the recession has impacted employment opportunities. Companies are either not hiring or downsizing.
The impact of the recession is being felt in India too. A result of this is that the Reserve bank of India has hiked up the interest rates on education loans. Students thus have to pay more EMIs, and this is especially of concern, given the lack of employment opportunities during this time. Additionally, the cost of travel has also gone up. Airlines have increased the rates of tickets due to the increasing fuel rate and the removal of the price cap by the government.
We live in an interconnected world. The looming recession fears in the US affects even the most remote countries. The impact is most felt by students in the US or planning to study there. They have to invest more and deal with the uncertainty associated with finding a job. However, this does not mean that one has to give up their dream. In fact, it just necessitates better planning and the optimum utilisation of resources.
(The writer is Co-Founder & COO, student housing marketplace University Living.)