Studying Abroad: The Financial Risks Indian Families Often Overlook

For many Indian parents, sending their child abroad to study is a dream they spend years saving for. Some set aside a part of their income every month, while others sell property, break investments or take loans to arrange the money. It is not a small expense. In many cases, families end up using a large part of what they have saved over the years.

The number of Indian students going overseas has also grown. More than 1.2 million were pursuing higher education abroad in 2025. And the expenses do not stop at college fees. Rent, food, travel and other day-to-day costs add up quickly. Parents usually work out how to pay these bills, but one question often gets less attention: if their child falls ill, meets with an accident or faces an emergency in a foreign country, will the family be financially prepared to deal with it?

Families usually spend months comparing universities, arranging finances, completing visa formalities and finding accommodation. Insurance, meanwhile, is often treated as just another requirement to be fulfilled before departure.

"Meeting a university's mandatory insurance requirements and protecting the larger financial investment behind an overseas education are two very different things," says Dev Karvat, Founder and CEO, Asego, a global assistance & travel insurance company.

Many students buy a policy simply because the university or destination country makes it mandatory. However, meeting the minimum insurance requirement does not necessarily mean a student or their family is adequately protected. The financial risks of studying overseas go well beyond medical bills.

When An Emergency Disrupts Education

Consider a student who falls seriously ill or meets with an accident and has to return to India midway through a course. The immediate concern would naturally be the student's health. But the financial consequences for the family could be equally serious.

Universities often collect tuition fees and accommodation charges well in advance. If a student has to discontinue the course, recovering these payments may not be easy. Depending on the institution's refund policy and the circumstances, a family could lose a sizeable amount in fees and other prepaid expenses.

The education loan, however, does not disappear. Parents may still have to repay the borrowed amount even when the student is no longer attending classes.

"The real question is whether families are prepared for situations that could disrupt a student's education or create unexpected expenses thousands of miles away," says Karvat.

Families should examine whether their insurance covers study interruption and the financial losses arising from unforeseen circumstances. They should also understand the conditions under which claims are accepted, as not every reason for discontinuing a course may qualify.

“There is another risk that deserves attention. What happens if the parent or family member financing the education faces a serious illness, accident or financial setback? The student's ability to continue studying may be affected if the person paying the fees is suddenly unable to provide support. Sponsor-related protection can help families prepare for such situations,” advises Karvat.

Medical Treatment Abroad Can Be Expensive

Healthcare is among the biggest financial concerns for Indian students overseas. The cost of treatment in countries such as the US, Canada, Australia and the UK can be considerably higher than what families are accustomed to paying in India.

A basic student health insurance policy may meet the university's requirements, but that does not automatically mean every medical expense will be covered. Exclusions, deductibles, co-payments and limits on particular treatments can leave students paying a significant amount from their own pockets.

Families should therefore read the policy carefully instead of looking only at the premium or the overall sum insured.

"Even with basic medical insurance, exclusions, deductibles and co-payments can leave families with significant out-of-pocket expenses," says Karvat.

Access to assistance is another important consideration. During a medical emergency, a student unfamiliar with the local healthcare system may struggle to identify the right hospital or arrange treatment. Help with locating medical facilities, coordinating hospital admission and arranging emergency medical evacuation can prove valuable in such circumstances.

A Parent's Emergency Trip Can Add To The Expense

For parents, perhaps the biggest worry is being thousands of miles away when their child needs them.

If a student is hospitalised or develops a serious medical condition, a parent may need to travel overseas at short notice. Last-minute flight tickets, visa arrangements and accommodation can make such a trip expensive, particularly when the family is already dealing with a medical emergency.

These are costs that rarely figure in the initial education budget. Yet they can add considerably to the family's financial burden.

"Last-minute airfares, visa arrangements and accommodation can add considerably to an already stressful situation," says Karvat.

Some insurance and assistance plans offer provisions for emergency visits by parents or immediate family members. Families should check whether these benefits are available, what circumstances qualify and how much of the associated travel and accommodation expenses are covered.

The Risks Are Not Limited To Illness Or Accidents

Students moving abroad often have to deal with things they may never have worried about while living at home. Losing a laptop, having baggage stolen or damaging an expensive personal belonging can mean an unplanned expense. For someone living on a monthly budget, replacing these items may not be easy.

There are other situations that families may not think about before their child leaves the country. A student could accidentally hurt someone or damage another person's property. What follows may be a demand for compensation or even legal action. Sorting this out in a country where the student does not know the local laws or how the system works can add to the difficulty.

"An accidental injury to someone or damage to their property can leave a student facing compensation claims and legal costs. Handling such matters in a country with unfamiliar laws can be particularly challenging," says Karvat.

This is where covers for personal accidents, lost baggage and personal belongings can help. Personal liability cover is worth considering too, as it may meet certain legal costs or claims arising from accidental injury or property damage. The protection available will depend on the policy's conditions, limits and exclusions.

Insurance Is Only Part Of The Preparation

Having an insurance policy for the student does not mean families can leave everything else to chance. Students should know who to call if they fall ill, meet with an accident or lose their passport and other important documents. They should also keep the university's emergency contact details handy and understand how to access local medical and other support services.

A little preparation before leaving India can save considerable confusion when a problem arises thousands of kilometres away.

A medical reimbursement policy may help meet eligible treatment costs, but it may not necessarily offer immediate help in finding a hospital, arranging transportation or coordinating with local service providers. This is where assistance services become important.

"Financial reimbursement alone may not be enough during an emergency," says Karvat. "Students need access to timely assistance, whether it involves identifying appropriate medical facilities, coordinating hospital admissions or arranging emergency medical evacuation."

Round-the-clock support can help students deal with situations that would otherwise be difficult to manage on their own. For a parent sitting thousands of kilometres away, knowing that the child can access help when needed can also provide considerable reassurance.

Before buying a policy, families should look beyond the headline coverage amount. They should check the exclusions, claim settlement process, emergency helpline availability, geographical coverage and the extent of assistance offered.

Make Risk Protection Part Of The Education Budget

Sending a child abroad for studies is not an expense that ends with paying the admission fee or arranging the first year's tuition. Families have to keep setting aside money for fees, rent, daily expenses and, in many cases, loan repayments. With so much money involved over several years, it is important to keep some room for emergencies. A sudden expense or loss of income can upset the entire plan if families have not prepared for it in advance.

Parents should assess the financial consequences of a student's illness, an accident, an interrupted course or the loss of financial support from a sponsor. They should also factor in medical emergencies, personal liability and the possibility of having to travel overseas unexpectedly.

The objective is not to insure against every possible eventuality, but to avoid being caught financially unprepared when something unexpected happens.

"Families need to look beyond admission, tuition and accommodation costs and consider study interruption, sponsor protection, personal accident and liability risks, emergency medical assistance and parental support during critical situations," says Karvat.

For Indian families, sending a child abroad is often the result of years of saving, planning and sacrifice. An unforeseen event should not undo that effort or leave the family struggling with expenses it had never anticipated. A little more attention to risk protection before departure can go a long way in ensuring that the student gets the opportunity to focus on what they went abroad to achieve: their education.