Apart from the obvious incentive of receiving a quality education, there are several other reasons that have caused the spike in Indian students wanting to study abroad, whether this is for an undergraduate degree, masters or a PhD. Getting an international degree is considered extremely prestigious and sets the student apart from the rest of his peers, it also ends up raising the bar of the particular organization that he is working in. This is because an international student ends up becoming a global citizen with a wide and unique perspective of the world.
Apart from wanting to attend lectures in top-ranking universities, Indian students are now more interested in pursuing unorthodox careers. Abroad, there is more variety in universities and several course options to explore. Of course with the introduction of the New Education Policy, we are seeing a shift in India, but there still is a long way to go.
However, several students do not consider studying abroad an approachable option, as it is seemingly expensive and far-fetched for the middle-class—which makes up for almost 50% of India’s population. Yet a recent study by UNESCO shows that out of 5 million international students in the world, and astounding 750,000 are from India. Earlier the majority of these students were spread across the US, UK, Canada and Australia, however today there are numerous students who consider studying in Germany, New Zealand, Singapore etc. How has this sudden shift come to be? Why are students keen on studying abroad? And has studying in a foreign nation become more affordable today?
It is the shift in perspective of Indian parents and students towards student loan that has been the primary reason for the clear rise in Indian students abroad. Up until 10 years ago, a loan seemed to be a taboo for Indian families, it was a burden that people didn’t want to carry. However, today education loans have been highly acceptable.
An education loan covers the basic expenses of college expenses including accommodation, exam fees and so on. What makes an education loan different from other loans is that it is issued directly to the student, while a parent can act as a co-borrower or the guarantor. Loans can be secured from banks or from NBFCs (Non-Banking, Financial Companies), and they can finance 100% of the education in many cases. All of them require certain essential documents, including but not limited to identity proof, income tax return slips, mark sheets from schools and so on. The only criteria to obtain a student loan is having graduated high school, being an Indian citizen, having received an acceptance from a foreign university and having a good academic backing. As a guarantee of repayment, the bank can ask for collateral. These are liquid assets that act as a guarantee for paying off the credit.
An education abroad guarantees you a good job opportunity, to a great extent, which is why the repayment of student loans begins after the student has completed his course, and in some cases, after he has secured a job. Thus the student can start repaying in instalments over 5-7 years.
There are several government and private banks that provide education loans some top-tier names are: HDFC, SBI, Axis, PNB. They all have their own rules that need to be studied carefully before deciding what education loan suits them best. Apart from this, there are NBFCs like Avanse, ISLP, Credila etc. their loan process is easier as compared to traditional banks. It is also imperative to note that different amounts have different rates of interest they can range from somewhere between 10-15%.
A couple of things to keep in mind before finalizing your education loan are the loan margin, the moratorium period and the exchange rate at the time. Apart from that student loan is an excellent way to bridge the gap between students and their dream schools.