Many Chinese students studying overseas have encountered similar financial issues. The country’s total cohort of outbound students reached a record high of 703,500 in 2019, but plunged to 450,900 in 2020 before recovering and hitting 662,100 last year, according to data from the Chinese Ministry of Education.
The three-year pandemic dealt a heavy blow to the Chinese economy in general, plunging its annual growth from 6.0 per cent in 2019 to the average of 5.2 per cent in the past two years. But small businesses were among those which were hit the hardest, and their post-Covid recovery has been slow.
“Owners of small and medium enterprises and middle-class families are often the main force behind studying abroad,” said Chen Jianwei, an associate researcher at the Beijing-based University of International Business and Economics.
I should take responsibility for my own consumption
“The income flow and asset stock of these groups are impacted by economic shocks, which naturally affects the financial stability of their children’s overseas studies.”
According to a 2022 survey by New Oriental, a leading study abroad agency in China, nearly 40 per cent of families sending their children overseas to pursue a degree have an annual income between 100,000 to 300,000 yuan (US$13,688 to 41,066). Fewer households earn 300,000 to 500,000 yuan yearly – 15.7 per cent – while only 4 per cent are from wealthy families with annual income of 1 million yuan or more.
Chen noted that lay-offs and salary cuts by many large companies, as well as localised risks in areas like the real estate market and trust investment, have resulted in asset shrinkage for many small business owners and middle-class families.
Depreciation of the yuan – a fall of more than 5 per cent against the US dollar over the last year – has also exacerbated their financial burden.
That was when Wang began to feel the pinch. Worries started to pile up: the high cost of living abroad, having to interrupt her studies, the return trip to China.
“My parents emphasised the economic situation at home was not good,” she said. “I felt 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 around 6,000-7,000 yuan.
“I [started] part-time jobs to relieve my parents’ financial pressures. I should take responsibility for my own consumption.”
Lockdowns prompt Chinese studying overseas to think twice about returning home
Lockdowns prompt Chinese studying overseas to think twice about returning home
For students in more expensive programmes, things are different.
In the US, tuition and fees at private universities have risen by 134 per cent in the last 20 years. Out-of-state tuition and fees at public universities rose by 141 per cent during the same period, while in-state tuition and fees increased the most, soaring by 175 per cent according to statistics from US News & World Report.
“The annual tuition was approximately US$160,000,” said Louis Liu, who was in a 5-year dentistry programme at the State University of New York.
However, when Liu was about to start his fourth year in 2021, he had to drop out. His family’s chain of kindergartens – a golden goose that brought millions of yuan in profits – went bankrupt after a severe flood and the pandemic struck.
“I had a sports car previously,” he said. “Then suddenly, I found myself unable to even find 3,000 yuan in my pocket.”
I really don’t recommend that young people from working-class families without much savings study abroad
I really don’t recommend that young people from working-class families without much savings study abroad
Liu was working days at a convenience store and nights at McDonald’s, but the double income could barely sustain his living expenses – to say nothing of tuition.
Eventually, Liu decided to give up on becoming a dentist in the US, returning to China without a college degree.
“When I started looking for jobs, I felt that I was a returnee from the US, so I had quite a prideful attitude,” he said. “This kind of identity change needs time to adjust to.”
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Overseas education no longer a sure route to success in China
Overseas education no longer a sure route to success in China
The 26-year-old Liu spent a long time searching for a job before choosing to be a ride-hailing driver early this year, which earns 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 without much savings study abroad, especially those who may want to come back to work in China,” he said.
“It would be better to use that money to buy a house in China instead.”
With many families seeing their incomes shrink, the risks of studying abroad are increasing in turn, while the economic benefits are also quite different from what they used to be.
‘Anxious’ Chinese rethink study-abroad options, from Canada to Malta and beyond
‘Anxious’ Chinese rethink study-abroad options, from Canada to Malta and beyond
Chen, the university researcher, pointed out that the input-output ratio of studying abroad is not optimal. The cost is going up, and academic credits earned overseas are not able to provide the same advantage in the job market as they once did, amid intense competition for employment.
Opportunities for development in China have also increased, rendering studying abroad unnecessary for many. But the prospects are not wholly dim, Chen said.
“For those who can shoulder the expenses, studying abroad remains a valid pathway. The quality of education in some developed countries is relatively high. Students who go abroad tend to have more broadened world views, and the returns can still be considerable.”
