Studying abroad: Changing trends and importance of education loans

With opportunities growing across the globe, more and more Indian students are aspiring to study abroad. Apart from looking at the academic reputation of the institutions they are seeking to apply to, students also look at job prospects in the destination country.

According to Vaibhav Singh, Co-Founder of Leap, students are closely looking at how different countries are managing their pandemic response, and which universities are providing support to international students – while they choose their dream universities.

Over the last few years, Singh says that the notion that Indian students only move abroad to the USA for education has been shaken.

“We are seeing students pursuing their higher education in countries such as Canada, UK, and Ireland in increasing numbers thanks to both the quality of educational institutions and also the opportunities for global careers there. Ireland especially is seeing interest from students,” he adds.

According to Singh, students are even moving away from typical courses like engineering and management in the US and exploring a wide variety of disciplines that they may otherwise not have the chance to pursue in India. Additionally, they are exploring courses like Game Designing, Internet of Things (IoT) related courses, and even some unique ones such as jewellery making, entrepreneurship and brand management.

For studying abroad, one of the important aspects is education loans.

While early on in the journey, a student can use different platforms to understand what loans he/she should get, at what rates, and from which providers.

According to Sandeep Wirkhare, MD and CEO of Indian School Finance Company (IFSC), parents should keep these three things in mind before opting for loans:

What is the interest rate charged? It can be 0 percent to anywhere up to 24 percent IRR.

Is the financier a registered NBFC with RBI so the customer would know the interest calculation would be fair and transparent?

While an education loan comes with the flexibility of repaying in 6-12 months as compared to other payment options like credit card or cash/banking channel it must be kept in mind that this is a loan and affects credit score in case of default.

Wirkhare further says the demand for school fee financing is very high given the current pandemic situation.

“In the survey conducted by ISFC we have got notable responses from the schools showcasing their keen interest in this proposition,” he opines.

Education loans help parents facing temporary liquidity crunch to pay in easy installments thereby helping parents manage their cash flow and reduce the student dropout rates in economically weaker sections.