Many Chinese students studying abroad face similar financial problems. According to China’s Ministry of Education, the country’s total cohort of foreign students reached a record 703,500 in 2019, but fell to 450,900 in 2020 before recovering and reaching 662,100 last year.
The three-year pandemic dealt a severe blow to China’s broader economy, plunging its annual growth from 6.0 percent in 2019 to an average of 5.2 percent over the past two years. But small businesses have been among those hit hardest, and their recovery from the coronavirus crisis has been slow.
“Small and medium-sized business owners and middle-class families are often the main driving force for studying abroad,” said Chen Jianwei, an associate researcher at the University of International Business and Economics in Beijing.
I should take responsibility for my own consumption. Grace Wang, Finland
“The income flow and wealth holdings of these groups are affected by economic shocks, which naturally affects the financial stability of their children’s studies abroad.”
According to a 2022 survey by New Oriental, a leading study abroad agency in China, nearly 40 percent of families who send their children abroad to study have an annual income between 100,000 and 300,000 yuan (US$13,688 to US$41,066 Dollar). Fewer households earn 300,000 to 500,000 yuan a year – 15.7 percent – while only 4 percent come from wealthy families with annual incomes of 1 million yuan or more.
Chen pointed out that layoffs and salary cuts at many large companies, as well as local risks in areas such as the real estate market and trust investments, have led to a decline in wealth among many small business owners and middle-class families.
The devaluation of the yuan – a fall of more than 5 percent against the US dollar last year – has also increased their financial burden.
That’s when Wang started to feel the pinch. The worries piled up: the high cost of living abroad, the interruption of her studies, the return trip to China.
“My parents emphasized that the economic situation at home was not good,” she said. “I felt like everyone was under pressure.”
Wang decided to cut costs by not buying clothes, cooking at home, and buying cheaper food. Her monthly expenses fell from 10,000 yuan, including rent, to about 6,000 to 7,000 yuan.
“I [started] Part-time jobs to ease my parents’ financial pressure. I should take responsibility for my own consumption.”
Lockdowns are making Chinese studying abroad think twice about returning home
Things are different for students in more expensive courses.
In the United States, tuition at private universities has increased by 134 percent in the last 20 years. Tuition and fees at public universities abroad rose 141 percent over the same period, while domestic tuition and fees increased the most, rising 175 percent, according to statistics from U.S. News & World Report.
“The annual tuition was about $160,000,” said Louis Liu, who completed a five-year dental degree at the State University of New York.
However, when Liu was about to start his fourth year in 2021, he had to drop out of his studies. His family’s chain of kindergartens – a golden goose that brought in millions of dollars in profits – went bankrupt after a severe flood and the pandemic.
“I had a sports car before,” he said. “Then suddenly I couldn’t even find 3,000 yuan in my pocket.”
I really don’t recommend that young people from working class families study abroad without a lot of savings. Louis Liu, driver
I really don’t recommend that young people from working class families study abroad without a lot of savings
Liu worked in a supermarket during the day and at McDonald’s in the evenings, but the double income was barely enough to cover his living expenses – let alone pay his tuition fees.
Ultimately, Liu decided to give up working as a dentist in the United States and return to China without a college degree.
“When I started looking for work, I felt like I was a returnee from the U.S., so I was pretty proud,” he said. “This kind of identity change takes time to get used to.”
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Education abroad is no longer a sure path to success in China
Education abroad is no longer a sure path to success in China
Liu, 26, looked for a job for a long time before settling on a ride-hailing job earlier this year, which brings him a monthly salary of over 10,000 yuan with relatively flexible working hours.
“I really don’t recommend that young people from working-class families study abroad without a lot of savings, especially those who might want to come back to work in China,” he said.
“It would be better to buy a house in China with this money.”
As many families’ incomes shrink, the risks of studying abroad are increasing, and the economic benefits are also significantly different than before.
“Scared” Chinese are reconsidering study options abroad, from Canada to Malta and beyond
Chen, the university researcher, pointed out that the input-output ratio of studying abroad is not optimal. Costs are rising and credits earned abroad can no longer offer the same advantage in the labor market as they once did, given the intense competition for jobs.
Development opportunities in China have also increased, meaning that studying abroad has become unnecessary for many. But the outlook is not entirely bleak, Chen said.
“For those who can bear the costs, studying abroad remains a sensible option. The quality of education is relatively high in some developed countries. Students who go abroad tend to have a broader worldview, and the returns can still be significant.”
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