Many of you can relate to this blog very closely if you are an engineer. Almost everyone pursuing engineering gives a thought to go for a masters degree from the USA. This starts around at the end of the third-semester exams, a result of the network effect of our classmates planning to attempt GRE/TOEFL. We don’t want to miss out on money-making opportunities in this fascinating country known as the United States of America.
I’ve been guilty of the same crime in my engineering years. The thought of going to the US hypnotized me more than the education degree itself. The lure of huge money makes us go wild, but we forget the risk associated with it. Let’s see a story of three of my friends who have completed a masters degree from the US to try to understand if we can answer our question.
The first case is of a girl whom I know from my mutual friends. She completed her bachelors in Computer Science from Mumbai University after which she went to pursue masters in the US. She is now working a job in the land of dreams and earns around $70,000 pre-tax per year. But what we don’t see is that she had taken a loan of ₹32 lakhs for that very same degree. The nominal rates on education loan in India range from around 9% to upwards of 11% which is quite high. She is 25 years old as of today, completed masters a year back, got a decent job and immediately started paying back her loans. It will be about five to seven more years before she can pay back her education loan entirely. Secondly, she is away from her family, wants to visit India more but couldn’t as it takes about a minimum of ₹1 lakh for a round trip to India. For now, she is sharing an apartment, living frugally and is always worried about what will happen to her after the employment visa expires or if she doesn’t get a renewal for the same. Her savings are not that great which is not because she has any luxuries but the sheer amount of loan EMI and other expenses that she has to bear in that lifestyle. Her regular costs include a car, apartment rent, groceries, and insurance. You all must be wondering why is she having a car but in her
The second case is about a friend from my college who also went to pursue masters in the US immediately after completing his engineering degree. He is currently working with an annual salary of about $78,000. He also took an education loan of about ₹15 lakhs to pay for his fees while the rest of the money was provided by his father from the retirement corpus. He doesn’t have a burden of very high EMIs of education loan but does worry a lot about employment visa. He was almost on the brink of coming back to India as he didn’t get an employer who was ready to sponsor his visa but eventually got someone to do it. He is fine now in his job but has similar problems as the girl above that is visa concerns, not enough savings, and to send some money back to parents as they used 30% of their retirement corpus in his education fees.
The third story is of a girl whom I met in the US and got to know about her from one of my colleagues. She came to the US after her bachelors, did MS and is now working here. All of the fees were paid by her parents as she was well to do in India. She is also concerned with similar worries about employment status but not much about any of the financial aspects.
To go further, I know a couple of people who didn’t get an employment visa and had to come back to India. They had substantial education loans which they started paying by getting a job in India. To give a glimpse of the process, after two years of student work, we need to find an employer who can sponsor our employment visa. Next, there is a lottery which selects about 65,000 people randomly each year to whom these visas are allotted. You can be immensely smart, but if you don’t get chosen in the lottery, you have to come back in case the student visa also expires.
Now let’s get to answering our original question as to whether it is worth spending so much money to pursue a masters degree in the USA. If you ask me, I won’t go for it, but it’s not a bad idea under certain circumstances. I feel its an excellent opportunity if you have financial backing from your parents that is to say if they can cover a minimum of 50% of the fees then it’s worth taking the risk. Secondly, you need to be absolutely understanding of the fact that there is a high chance that you would need to come back to India if you don’t get an employment visa. But if you feel like taking a loan for all the amount, then you need to understand that it is a high-risk situation that you are getting yourself into and even if everything works out your life is going to be like that girl above. You will definitely survive, but for the first few years, you have to forget about savings or even financial independence. Rest it is a personal decision to all of us. Personally, I didn’t do it even though I almost was going to pursue it.
All these financial facts aside, the US is not as glamorous as it seems from the outside. People get sacked here left and right if the performance isn’t good. The high salaries that we hear about are not as high when you compare it to expenses. A regular meal in a decent restaurant will cost around $8 to $10 while a proper dinner in a fancy restaurant will cost about $40. Nominal monthly groceries costs around $300 which is quite high if we compare it to India. As a person who is very much attached to India and its culture, the US seems pretty bland to me. I visit for about a month every year, but it just doesn’t work out for me. At the end of the day, its a personal decision based on our finances. To answer in one line, if you can get a scholarship or your parents can cover 50% of the fees, it’s okay to pursue given the fact that if you get a visa there is a high chance of earning good money in your time here. But be sure that you don’t buy depreciating assets like a house back home in India by seeing the high salary that you might get in the US.