Why students from India should avoid loans to study at universities in the USA

Many American students pursuing most Master’s degrees at the top, private U.S. universities take on debt which will not be supported by income from jobs upon graduation, according to a Wall Street Journal analysis of U.S. Education Department data.

American universities typically view Master’s programs as a big source of revenues to cover salaries, overhead costs and subsidize undergraduate and other programs.

Students “are lured by the aura” of getting a Master’s degree from Columbia, New York University, University of Southern California and other top private colleges, the Journal noted.

Depending on the length of the program, many American students borrow $100,000 to more than $300,000 to pursue M.S., M.A. and other Master’s degrees at these universities in history, social work, architecture, publishing, speech pathology, marriage and family counseling, film, theater, and other majors.

Two years after graduation these Americans earn typically about $40,000 to $60,000 per year, far below what is needed to repay their education debt.

Yet, even such low-to-moderate paying jobs are not available to foreign graduates, unless they are hired by an employer who will also sponsor them for a work visa.

Sponsored work visas in the U.S. can be difficult to obtain, due to the financial obligation an employer must assume to grant one as well as the limited number of such visas issued. So, without income from jobs in America, students from India face a much higher financial burden than American students.

In recent years, very few of the top engineering and science graduates from India, including from the Indian Institutes of Technology, are taking on $120,000 to $240,000 in bank loans to pursue one-or two-year Master’s degrees at American universities.

They realize that the chances of finding practical training and work visas after graduation are slim. So, they fear taking the risk of being unable to repay the large debt and lose their family home to the banks in India, which used it as collateral for the loans.

Instead, the top technology and science graduates in India work for local operations of American and other multi-national companies. They know they have a good chance of being transferred to a lucrative foreign posting. Many of those eager to migrate are enrolling for Master’s degrees in Canada, which offers work and permanent resident visas for foreigners with advanced degrees.

Apparently many of the top, private U.S. universities, eager to avoid a drop in revenues, are diluting their admission standards to fill up many of their Master’s programs.

Since the mid-2010’s, anecdotal evidence suggests that students from India, enrolling for most Master’s degrees in the U.S., are mainly from second or third tier Indian universities. They - and their parents - are proud about gaining admission to American universities, including some in the Ivy League.

These students take on loans from Indian banks at annual interest rates of 13% or higher, to fund their American degree. Those pursuing advanced degrees in science, technology, engineering and math (STEM) expect to find U.S. employers sponsoring them for practical training visas, if not work visas, upon their graduation.

The training visa allows foreign STEM graduates to work in the U.S. for three years. The Indians hope that, after working for three years in the U.S., they will be able to repay most of their educational loans. Indians pursuing MBAs and social science Master’s degrees bear a far greater financial risk since their training visa is valid for only one year - if they can find such work.

However, fewer students from India are getting practical training visas, let alone work visas. In 2018, for instance, only one out of six students from India got a practical training visa, from a class of 40 graduating with a Master’s degree in an applied engineering field at an Ivy league university. The rest, in order to continue staying in the U.S. in the hope of finding visas and jobs, enrolled in other educational programs in the U.S., thereby adding to their debt burden.

In 2019, either not knowing of the plight of the 2018 graduates or ignoring it, as many as 16 students from India took on $70,000 in loans to pursue the same one-year M.S. program. The fact that 40% of students in the program were from India should have been a warning sign that there is little demand for the degree because even American graduates were not finding jobs.

Years ago, the website of the Master’s program prominently displayed the percentage of graduates who got jobs upon finishing their degrees. Now the website says “our goal is to provide the best education.”

To receive Global Indian TImes stories kindly connect through either:

LINKEDIN: HTTPS://WWW.LINKEDIN.COM/COMPANY/GLOBAL-INDIAN-TIMES/?VIEWASMEMBER=TRUE

TWITTER: HTTPS://TWITTER.COM/GLOBALINDIANTI2  

FACEBOK: FB.ME/GLOBALINDIANTIMES

EMAIL: GITIMESCONTACT@GMAIL.COM

(c) Global Indian Times. Prior written permission required to reproduce any content. All rights reserved under U.S. copyright laws.