Average cost of studying abroad: Masters in Europe vs America comparison

Average cost of studying abroad: Masters in Europe vs AmericaAfter months of deliberation, you’ve decided that your undergraduate education isn’t enough. Now it’s time to pursue an international Master’s Degree. But where should you study? For many, the decision between the United States and Europe isn’t an easy one.

Just when you thought you had it all sorted!

You are not alone in your confusion. Every year, thousands of students weigh their options between these revered centers of post-graduate education while looking at a variety of determinants. The two most significant factors always boil down to the quality of education and financial viability.

Still, candidates often find these key factors are insufficient to make an unbiased comparison between European and American Masters programmes. This decision requires a larger scope.
 


Studying Your Masters/MBA in USA vs. Europe

A Financial Comparison – Costs Before Attending

 

Preparation costs

Unfortunately, a desire to attend a Masters abroad does not translate into reality quickly or easily. Highly-ranked programmes require standardised tests such as the GMAT or GRE – and you may need to sit for the TOEFL exam, depending on the course. And, they all come with price tags;the GMAT alone costs US$250.

Apart from the cost of the exams, there are other preparation expenses. Depending on your confidence levels, you might include test preparation books, tutoring or classes, admission consulting charges, and application fees- not to mention visa charges and similarly required fees. While these cumulative costs can be substantial, they don’t tend to vary much between USA and Europe.

 

Cost of attendance

Your cost of attendance is the sum of tuition and living expenses. While a Master’s degree in the UK may cost around US$20,000, the cost of living could cost between US$18,200 and US$20,200 per year! Meanwhile, a beer in Sweden will deplete your wallet by EUR5! While you can make some adjustments, you’ll want to factor living expenses that reflect your lifestyle and tastes.

American universities charge around $20,000 per year, though private universities are more expensive; MIT charges about $46,000 a year. Living expenses in the US are range from US$7000 to US$20,000, depending on where you live and your lifestyle. Generally speaking, you may find the cost of living to be less expensive than in Europe.
 

Time

Obtaining a Master’s degree in Europe typically requires one year of study; in the US it tends to stretch to two years. By virtue of time spent in class, the actual cost of attendance in Europe is much lower than the US.

However, two years also ensures more exposure to your industry – and it often comes with summer internships. It may cost more, but the two-year investment can pay off. Still, you can’t forget about the time away from work.

You’ll need to spend time comparing time studying (and away from your salary) with the returns on investment. Take time to add up the costs and returns, as well as the pros and cons; and in the end, time saved may mean money saved after all!
 

Course Value

In India, American schools may have a higher perceived value, but you can’t discount European institutions. Many of the world’s best schools, especially in the sciences, are located in Europe.

A close look at school rankings is recommended, but you should evaluate similar courses against each other. When you weigh your options, think in terms of global academic reputation, faculty-to-student ratio, employer reputation, the proportion of international students and faculties, the facilities, and anything else that matters to your personal and career prospects.
 

Funding Sources

Masters study is becoming increasingly popular. But, that doesn’t make these programmes cheaper. Most students need to consider multiple avenues of finance to complete their degree.

While many schools offer scholarships through their Financial Aid offices, there are other organisations that award funds as scholarships and bursaries. As each group has unique eligibility criteria and application process, it is better to start researching early; otherwise a deadline may be the only thing keeping you from a scholarship. And, there is no better money than free money!

Few scholarships cover the cost of attendance, however, and many students still find a gap between their savings and the amount they need for education. As a Master’s degree almost guarantees a higher salary, its loans are a financially viable option. But finding the right one isn’t as easy as the decision to take a loan. Comparing options can be complicated, but you will need to consider:

  • Annual Percentage Rate (APR): APR is the total cost of financing. Simply put, while loans quote interest rates, there are other hidden fees such as origination fee, floating base rate,and more. APR sums all costs of your loan into a single number which you can use to compare different loan products.
  • Currency: Ideally, the currency you borrow is the one you use for repayment. If you expect to remain in your region of study after graduation, you may prefer a loan in that currency.
  • Grace Period: Not all loans expect you to repay while studying. Some offer a grace period to allow students to settle into a new job before making those repayments.
  • Repayment penalties: There are some loan products which penalise borrowers for early repayment. There are, however, those that encourage early repayment, and you’ll want to look for those as you never want to be saddled with educational debt indefinitely.
  • Co-signer or collateral: You might earn your seat at grad school on your own merit, but that doesn’t mean banks see you as an individual. Many student loans require a co-signer or guarantor – though you’ll find products that don’t require this.

When choosing a loan, always calculate every point according to your priorities and plans, and ask for clarification until you are completely clear on your responsibilities

 

INSEAD vs. Wharton: A case study

Just to understand the process, compare an MBA at INSEAD in France with one at Wharton, University of Pennsylvania. (Data sourced from Financial Times Global MBA Ranking 2016 and respective websites of the colleges.)

Factors INSEAD Wharton
Ranking #1 #4
Tuition Fee $70,000 $110,000
Living Expenses $30,000 $60,000
Total Cost of studying $100,000 $170,000
Time 1 Year 2 Years
Financial Aid for students 59% 76%
Employment 83% 94%
Salary Increase 96% 84%

It’s not as cut and dry as you might expect and, therefore, requires plenty of attention before accepting an offer at either institution (should you have the choice).

We’ve examined the overarching financial differences between Masters study in the US and Europe. Let’s look into the other financial factors that come into play on campus and after graduation.
 

Living Cost On Campus and Post Graduation

Gauging whether the US or Europe provides a better educational and financial investment is a multi-variant problem and requires multiple levels of investigation. From a financial standpoint, applicants must consider the application process, the cost of education, value of the course, and all the loans, scholarships, and financing options available.

But that’s not all!

There are plenty of elements that come into play while on campus – and just after graduation that will affect your finances. These also need consideration before choosing where to pursue your MBA.
 

Campus Life

American campuses offer a never-ending stream of student activities. European schools, on the other hand, are designed more for study. Either lifestyle can prompt a culture shock for international students unaccustomed to the lifestyles there.

Given the length of time you will be on campus, it’s advisable to speak to alumni or enrolled students of targeted school about campus life, facilities, extra-curricular activities, and culture. Most colleges have international student clubs that assist with the resettlement process (some clubs offer workshops with insights into international culture – even dating tips).

If your campus or visa offers chances to work on or off-campus, you may jump at the chance. After all, who doesn’t need the money? And, that may look incredible on your CV or resume. But, it may also put a little too much pressure on the other activities that make Master’s education so valuable. Remember, you’ll already be exceptionally busy; but if your budget is very tight, a programme that allows for part-time work may be just the thing you need.
 

Buffer Budget

Apart from the day-today living expenses, you’ll need to factor in some budget for travel costs (including visits home) and health care expenses.

Keep in mind that exchange rates can vary tremendously during a one or two-year period. Sometimes you save, and sometimes you end up spending more than you budgeted. But, there’s no guarantee that you can hold off on bigger expenses until the exchange rate works in your favour.

Graduate study involves a great deal of networking and peer learning. Although you can meet for a coffee relatively cheaply, you’ll want to get involved with formal activities. And those cost plenty of money. Depending on the institution, you can expect to pay somewhere between US$1000 to US$4000 to attend all those parties, join interest clubs, and participate in global immersion treks.
 

Employment Opportunities and Visa

There always a demand for skilled professionals, regardless of the industry. However, most countries have policies in place to protect the interests of their citizens first. As such, international candidates don’t always have it easy when participating in recruitment activities.

Working abroad after studying always means a pile of paperwork to wade through, especially in the UK and the US. Visa restrictions for international students can put them in an awkward position of ‘get a job or get out’.

Recently, countries in the EU have become stricter regarding visas for graduates outside of the EU. Depending on the how the Brexit is negotiated, it’s possible we may see changes in both the EU and the UK.

A few European nations like France and Germany have relaxed rules to accommodate international students to find jobs. Germany, in 2012, introduced a new legislation regarding Entry and Residence of Highly Qualified Workers, which “allows the international students to stay back in the country for 18 months after graduation to look out for a job in their field of study.”

On the other side of the Atlantic, employment opportunities in the US are relatively aplenty with multiple centres of commerce. And, Canada has a relatively encouraging post-grad employment policy with a resilient economy and liberal culture.

To secure an H1B work permit, there are strict caps in place. After that, applicants are at the mercy of a lottery system; there is no guarantee you’ll get a work permit, regardless of the company or job you were hired to do.

However, students of STEM programs in USA can rejoice. Starting this fall, STEM students are eligible for a further 24-month Optional Practical Training (OPT) – in effect, they can work for three years in the US without needing an F1 to H1B visa conversion immediately after graduation. Many students save enough money to pay back their education and develop professional skills before return home.

Keep in mind that the subject that you have specialized in also plays an important role in job availability and your employability. If your field is receiving a lot of global attention and making rapid strides of progress, your opportunities will multiply. However, if the entire sector is down, this can affect the chances you have in securing employment quickly.
 

Validity and merit of the degree in the native country

An American Master’s Degree in Law is not enough for you to practice in India or many other countries. It’s imperative to pass an exam to join the Indian Bar Council – and the policies for other countries typically demand the same.

Since some professions require you to know local law and regulations before you can practice, the knowledge and skills gained abroad are not exactly transferable. While law is one of the fields where a degree doesn’t automatically transfer, it’s not the only one. However, a Masters in Law isn’t always undertaken by practicing lawyers.

Also, irrespective of global rankings, some universities are more renowned in India than others. UK universities deserve a special mention due to historical ties. If you plan to return to India after graduation, you may find the perceived value of a degree works in your favour during your job search.
 

Intangibles

Beyond the above, there are many other factors that make a course worth the money you spend on it. Sometimes the brand becomes important; it’s almost impossible to take the shine away from a Harvard or London Business School degree.

Apart from brand, peer-learning and the interactions with professors and faculty are decidedly important. Your Masters is also impacted by school location, as you imbibe the local culture unconsciously. And although these shouldn’t necessarily make your decision, they should weigh into your thought process. No one wants to spend that much time or money in a place they don’t enjoy or people they don’t get along with.

While the whole decision-making process might seem daunting, one must always remember that at the end of the day, Masters from a top university in Europe or America is a great investment in your future, and, if you need it, there are plenty of financing options to support your future.


 
Rishabh GoelAuthor Bio: Rishabh Goel is an Associate Relationship Manager at Prodigy Finance. He studied Economics & Engineering at BITS & Masters at London Business School. He has helped Indians excel at GMAT/GRE and mentored students to attend top schools globally.

This article is part of CrystalConnect, an outreach initiative by MBA Crystal Ball.


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13 Comments

  1. Preeti Vishwakarma says:

    hi,

    I want to continue PHD – Marketing in USA. Kindly guide on the same for getting a good university and marks required for the same.
    Is doing is very costly or is the university will be providing a good stipend.

    Looking forward for your revert on the same,

    Regards,

    Preeti Vishwakarma

    • Rishabh Goel says:

      Hi Preeti,

      Thank you for your interest in Prodigy Finance.

      Many PhD programmes are supported by the school and the students receive a stipend as well. The stipend varies according to University.

      Best wishes,
      Rishabh Goel

  2. Raj says:

    Hey There,

    I want to know some details about MBA Program from Singapore/Canada. what are the job scene in these countries after doing MBA. I want to work in that countries for at least 2-3 year for repayment of education loan and save some amount.

    I read in somewhere, In Germany tuition fee are very less for local and international students, what are the job opportunities after doing MBA from Germany.

    Please reply me asap.

    • Rishabh Goel says:

      Hi Raj,

      Thank you for your interest in Prodigy Finance.

      The job opportunities in Germany are great as well. The Cost of Attendance is relatively low, economy is doing well and has a relatively easier immigration policy.
      However, MBA in Germany is traditionally seen as an ‘American Degree’ and PhDs are held higher in value by local companies.

      Best wishes,
      Rishabh Goel

  3. vrinda says:

    Hey rishabh..i am plannin to do my MS at USA..do u guys need assests for loan?

  4. Nagendra Upadhyay says:

    Hi,

    I am Nagendra,currently working as a s/w developer with 2 yrs work ex. I am planning to pursue MBA here in India but am also keeping my options open for an Intl. Degree. Which country would offer me the cheapest and economical degree considering my middle class background. All I can do best is shelling out not more than 30-35lcs. Countries among NZ, OZ and EU are my preferences. Thank you.

    • Rishabh Goel says:

      Hi Nagendra,

      Thank you for your interest in Prodigy Finance.

      While an MBA programme can be an expensive investment, it is important to choose your MBA at a school that offers great placement statistics and helps you attain a salary that justifies your investment. We would recommend looking at MBS programmes from an RoI perspective and you could start with the FT 100 rankings.

      Happy to answer any further queries,
      Rishabh Goel

  5. Alvin says:

    does Prodigy Finance provide loan to doctorate courses (doctorate of business administration -studied after mba) which are in list of colleges authorised by Prodigy Finance (like In harvard business school /Stanford etc..)

    • Rishabh Goel says:

      Hi Alvin,

      Thank you for your interest in Prodigy Finance.

      Prodigy Finance provides student financing for graduate programmes such as MBA. Unfortunately, as this moment we are not supporting PhD programmes.

      Best wishes,
      Rishabh Goel

  6. D K Choudhury says:

    Sir
    I am working in a State Govt Public Sector since 13 years in executive post.Now I want to join one year Executive MBA either at USA or at EUROPE without GMAT score with financial loan facility.
    Please guide me

  7. RAJ KUMAR says:

    My son is studying in York University in Canada.He is doing graduation in Finance. I want he should complete MBA in Finance after graduation means without work experience. Kindly suggest best university in world . There is no choice of any country.

  8. Shreya Rajesh Hundekar says:

    Hi Rishabh,

    I will be completing my bachelor’s degree in chemistry this April. I want to pursue MBA. I wish to go for an International degree. Can you please guide me ?
    Is it better to do it here in India or abroad? (I am from middle class background.)

    Thank you.

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