Is international education becoming a luxury in Nigeria due to the volatile exchange rate?

The dream of studying abroad has always been a symbol of prestige and opportunity for many Nigerians. However, the reality of achieving this dream is becoming increasingly elusive, especially with the persistent decline in the value of the naira. The once attainable goal of pursuing international education is now veering into the realm of luxury. This shift is largely driven by the volatile exchange rate, which has significantly reduced the purchasing power of Nigerians. Let’s explore how the current economic landscape has made international education more expensive, particularly in Canada, and whether innovation can offer a way out of this challenge.

“This financial strain has forced some students to work overtime, causing serious mental health challenges. In recent times, this has even contributed to an alarming rise in the number of international students in the UK experiencing severe stress, with reports of tragic deaths among the student population.”

Comparing application fees and tuition costs: Then vs. now

Two years ago, Nigerians applying to study in Canada faced relatively affordable costs. For instance, application fees for Canadian universities in 2022 typically ranged between CAD 100 and CAD 200, which, at the exchange rate of approximately NGN 400 to CAD 1, translated to NGN 40,000 to NGN 80,000.

Fast forward to 2024, and the exchange rate has skyrocketed to around NGN 1,130 per CAD, pushing those same fees to NGN 113,000 to NGN 226,000—a nearly 200 percent increase compared to two years ago. This sharp rise highlights how quickly costs have spiralled, making the once-accessible dream of studying abroad much more difficult for many Nigerian families.

Similarly, tuition fees have seen an exponential surge in Naira terms. In 2022, the average tuition for international students in Canada was approximately CAD 30,000 per year. This was equivalent to around NGN 12 million at the time. By 2024, while tuition fees in Canada remain fairly stable in Canadian dollars, hovering around CAD 30,000 to CAD 35,000, the exchange rate now means that Nigerian students must pay over NGN 34 million annually.

The implications for students

This dramatic increase in costs poses a double-edged sword for both prospective students and those already studying abroad. For students still in Nigeria, the ever-weakening Naira presents a significant hurdle to securing study permits. Many families find themselves unable to meet the financial requirements for proof of funds, which is an essential part of the visa application process.

For students already in Canada or other international destinations, the situation is equally dire. Many rely on funds sent from home to cover living expenses. With the devaluation of the naira, these students are receiving less value for the same amount of money, making it harder to afford basic needs like rent, food, and transportation. As a result, some students are forced to take on part-time jobs or increase their working hours, which can interfere with their studies. Many students are also finding it difficult to complete their tuition payments, leading to higher dropout rates and poor academic performance. This financial strain has forced some students to work overtime, causing serious mental health challenges. In recent times, this has even contributed to an alarming rise in the number of international students in the UK experiencing severe stress, with reports of tragic deaths among the student population. This underscores the urgent need for better support systems and financial solutions for international students.

Read also: Charterhouse UK: Redefining international education standards in Nigeria

Is there room for innovation?

India presents a compelling case study on how innovation in the study of finance can transform a country’s presence in international education. Indian students currently make up the highest number of international students in top study destination countries like the United States, Canada, and the UK. As of 2023, over 1.3 million Indian students were studying abroad, with approximately 319,000 in the U.S., 290,000 in Canada, and 120,000 in the UK. This success is not only due to strong academic performance but also because India has “hacked” the study finance landscape through a combination of government support, private sector involvement, and innovative financial solutions tailored to international students.

Indian financial institutions have tapped into this opportunity by offering accessible student loans, flexible repayment terms, and co-signing arrangements with parents or guardians. This model has enabled many Indian students to overcome financial barriers and pursue education in prestigious international institutions. It’s a wake-up call for local Nigerian financial institutions to explore similar opportunities by funding international education. If Nigerian banks and fintech companies can offer tailored loans and financing packages for students, they could help ease the pressure of currency volatility and open doors for more Nigerians to study abroad.

In addition to local financial innovations, institutions in destination countries must recognise the value Nigerian students bring. Nigeria is one of the top sending countries for international students, and Nigerian students are highly regarded for their intelligence and academic achievements. To cushion the effects of the exchange rate, universities and colleges could consider offering application fee waivers for Nigerian students, along with country-specific scholarships, financial aid programs, more affordable tuition deposits, and friendly payment plans that allow students to spread the balance of their tuition over a considerate period while they study. This approach would not only help alleviate financial burdens but also reinforce the strong educational links between Nigeria and countries like Canada, the UK, and the U.S.

Data insights from MyStudyHelp

Recent data from MyStudyHelp offers valuable insights into the funding needs and study preferences of Nigerian students applying for international education loans. Analysis of the dataset reveals that:

The United Kingdom and Canada remain the most popular study destinations, with over 70 percent of students applying to institutions in these countries.

A significant number of students requested loans in the range of $10,000 to $50,000, indicating a strong demand for midsize financial support. The loan amount requested reflects the rising cost of education and living expenses in these countries, further amplified by the weak Naira.

The proposed courses of study show a strong preference for fields like engineering, MBA, and technology-related programmes, reflecting the demand for practical, career-focused education. This trend aligns with global skills shortages in these fields and the growing appeal of high-income career paths.

Study loans: A viable alternative?

In the face of rising costs, study loans are increasingly being explored as an alternative source of funding for Nigerian students. However, access to affordable student loans remains limited. Mystudyhelp, for instance, is one platform that offers financial assistance to international students after they secure their study permits and are already in their destination country. However, there is still a need for broader access to loans that cover tuition, living expenses, and even visa-related costs upfront.

In countries like the UK and Canada, domestic students benefit from structured loan systems with low interest rates and deferred repayment until after graduation. Introducing such loan models in Nigeria could help ease the financial burden on families. Additionally, partnerships between Nigerian banks and international financial institutions could provide students with more flexible loan packages that are tailored to the unique needs of studying abroad.

International education, once a symbol of aspiration, is slowly becoming a luxury that fewer Nigerians can afford. The volatile exchange rate and high costs associated with studying abroad are pushing many prospective students to reconsider their options. Yet, with innovation, the expansion of study loans, and more collaborative efforts between financial institutions and educational providers, there is hope for making global education accessible to more Nigerians in the future. The key lies in adapting to the new economic realities and exploring creative solutions to fund the dreams of those eager to learn and grow beyond Nigeria’s borders.