This is the time of the year when the Institute for International Education (IIE) releases its much awaited Open Doors report, which has been published annually each year since 1954. It tracks the migration of students globally. Of specific interest is how the US alone, among other countries, acts like a powerful magnet for Indian students.
When India beat China
The 2015 Open Doors Report finds that while China remains the top country of origin of international students in the US, India’s growth outpaced China’s this year. Students from India, increased by 29.4 per cent to a record high of 132,888! The last time India beat China in this race was in 2001, when about 50,000 Indian students went to the US.
In other words, the number of Indian students going to the US has increased by 265 per cent since 2001. This amounts to nearly a million bright minds headed to just one country in the last 15 years.
And then there are other US-wannabes: Canada, the UK, Australia, New Zealand and Germany, who all covet Indian students. And by the looks of it, a majority of the students aren’t returning anytime soon.
The backstory
When Indian students migrated to US universities during the 1960s, 1970s and 1980s, the main driver was that US graduate schools were looking for “best and brightest” to work in academia, research and medicine.
The number of institutions of higher learning in India was limited to just a few IITs, IIMs and the Indian Institute of Science, with demand far outstripping supply. To lure Indian students, US universities would often offer fully funded scholarships and assistantships. Many would stay back in the US after graduation because career opportunities back in India were inferior.
Today, the majority of Indian students not only do not get any financial aid, but are forced to pay international rates of tuition, which are sometimes three times higher than what American students, who sit next to them in class, pay!
And the drivers are different too — in modern India, there certainly is no scarcity of places to pursue higher studies. The number of elite public sector institutions such as the IITs, IIMs, and schools in Medicine, Dental and Law has greatly increased. There are now a number of private institutions such as the ISB and IIIT, which didn’t even exist before. The number and types of job opportunities in rapidly growing India are vastly superior to what they used to be in the mid-1970s.
Fierce competition
So, what is driving Indian students abroad when the world is investing in India? In an interview with National Public Radio, Shreyas Manohar, a student at Columbia, explained it succinctly when he said: “India’s exam-based system is a huge barrier, even for many good students. You have so much pressure to succeed and because of that, naturally, many people don’t do as well as they normally would have”.
He says he considered studying economics at an Indian university but, “To get into the best econ colleges, I needed a 97 or 98 per cent on my final exam; and still that wouldn’t guarantee my admission”. So he chose the easier way out. If he could somehow pay to get in, he would. And Indian banks were ever ready to offer education loans.
It is one thing to get into Columbia, one of the best universities on the planet, and it is quite another to simply pay and get into whatever school simply because its address is in the US.
More aggressive
American universities have become so aggressive that it is common for them to now have a separate department devoted solely to international student recruiting. During a swing through Asia recently, colleges and universities such as the Albany College of Pharmacy & Health Sciences, Alma College, Augustana College, Felician College, Foothill and De Anza Colleges, High Point University, Keystone College, Roger Williams University and Salve Regina University descended on Indian cities, luring students to enrol in their institutions.
What’s the problem, you ask? Well, these places of learning are unknown to most Americans, but for the few who graduated from them. It is no wonder then, that the US Department of Commerce proudly boasting of international students contributing nearly $31 billion to the US economy in the 2014-15 school year.
Higher Education has become a big export business for the US and an easy way to attract a pool of healthy youngsters who begin work soon after graduation and pay income taxes to subsidise the living standards of US citizens.
Twenty years after India announced that it is a player on the global stage, it has come to this. Our best and brightest leave for western shores — as they have been doing for nearly 50 years — in the pursuit of the proverbial golden apple. But even the not so best and brightest leave to study abroad in part because it is less stressful to get admission to foreign schools, never mind the cost. Most of these don’t ever return to India, deciding to settle in even substandard jobs abroad — which is the only way they can pay back their loans and hold on to the allure of living abroad.
What MBAs can do
The result is that India loses on all counts. It loses valuable human capital in which it has invested its scarce tax revenues and gets no tax contributions in return because India doesn’t impose tax diaspora income.
Family owned businesses in India no longer have the most able children to take over and expand, even as the country’s growth ranks it among the world’s best. Money leaving India in the form of education loans could well have been invested for the India’s higher education infrastructure, but instead, it is helping balance the bloated budgets of US colleges. Large scale migration of youngsters abroad is burdening India’s vaunted family structure with senior citizens left behind, content to have Skype conversations with their wards.
MBA students should consider quantifying the impact to India of the Open Doors Report through case studies, or better yet, campus-wide debates.
Because highlighting a problem is the first step to seeking a solution.
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