KUALA LUMPUR, Feb 1 — Local students are being forced to give up on plans to study in the US and UK due to the spike in costs caused by the ringgit’s sharp devaluation, according to placement centres here.
Prior to the plunge in the value of the Malaysian currency, both countries had been the preferred destinations for local students continuing their tertiary education abroad, but continuing to do so now meant paying an average of RM70,000 more for a course in US.
In the UK, the average rise was even more prohibitive, according to one placement centre, which cited a spike of RM90,000 for a complete four-year course last year versus 2014 before the ringgit started its decline.
“This does not include the average monthly cost of living where students would need at least US$1,500 in the US or the same amount in British pounds to study in the UK.
“Imagine paying RM4,800 then and RM6,300 a month now to a student in the US… that is a RM18,000 difference a year (for living expenses alone),” the centre told the Malay Mail Online on condition of anonymity.
According to the placement centre, the depreciating ringgit has caused around 250 students to amend their plans to either continue their education locally or seek out more affordable destinations.
Another student placement centre, JM Education Counselling Centre (JMECC), said more students were now considering Australia, New Zealand, and Ireland as alternatives to the US and UK.
“In 2015, about 60 per cent of the students who came to our centre chose Australia over other countries.
“The reason for this is mainly due to the weak ringgit,” JMECC acting assistant marketing manager Erwin Tan told Malay Mail Online.
While the ringgit has depreciated against most major world currencies, the rate of decline was not universal. Although the ringgit’s fall was primarily triggered by the fall in crude oil price — Malaysia is a net oil exporter — it was also fuelled by a crash in other commodities.
The fall in commodities prices also weakened the currencies of other economies that are dependent on these exports, such as Australia and Indonesia, mitigating and even nullifying the ringgit’s fall against such countries’ currencies.
At the start of 2014, the ringgit had traded around 2.90 to the Australian dollar and now, two years later, it is around the 3.00 mark.
Also two years ago, the ringgit hovered near 3.28 to the US dollar and 5.38 to the sterling pound.
“Then, it was fairly affordable but not today when the British pound and US dollar to ringgit hover around RM6 and RM4.30 respectively,” Tan said.
Taylor’s University deputy dean of school of Liberal Arts and Science Associate Professor Dr Anindita Dasgupta said interest in its American Degree Programme (ADP) has remained steady despite the depreciation of ringgit against the US dollar.
“Taylor’s ADP provides students with an affordable option of completing the first two years in Malaysia, which considerably brings down the overall costs of a 4-year degree in the US.
“The final two years, which are crucial as the students start taking higher level as well as Major courses, are then spent in an American University, which is where they derive enormous academic exposure,” she said.
She explained that Taylor’s 2+2 twinning programme helped mitigate the increase brought about by the fall of the ringgit, while still allowing students to enjoy the full benefits of a US education.
Since 1996, she said the university has sent more than 4,500 students to some of the top universities in the US.
As with Taylor’s, SEGi University and Colleges said the ringgit’s decline has yet to result in a significant impact on its students’ plans to continue their studies abroad.
The group’s president Datuk Mohamed Azahari Kamil credited this to its partnerships with universities in the UK, US and Australia, which he said allowed it to formulate an affordable fee structure for all its international programmes.
“This means massive financial savings for students and their guardians as SEGi has a reasonable fee structure, paired with the lower cost of living in Malaysia,” he said.
SEGi has also benefitted from the weak ringgit, Mohamed Azahari said when pointing out that this has attracted international students from Central Asia, the Middle East and Africa to pursue their studies at its facilities.
Sunway University College head of admission Yee Huey Mei said although the university did not see any remarkable drop in students opting to go abroad to study, she expected that students may begin to opt for an entirely external programme if the ringgit deteriorates further.
“Because we offer students a choice to complete their studies either locally or overseas, we are expecting to see a trend where students might choose not to go overseas if the ringgit dips below RM5 against the US dollar,” she said.
While the cost of study fees were controlled by the university to ensure affordability, Yee said other aspects like accommodation and cost of living abroad were not subsidised.
Economists have begun calling the ringgit’s 4.20 level against the US dollar the “new normal” although outliers have predicted that the Malaysian currency could deteriorate to around 5.00 versus the greenback.