Do you often think of how studying in your dream university would have been easier if you had more resources to fund your higher education? Careers360 hosted a session with Prasant Bhonsle, CEO and Founder, Kuhoo Edufintech, to answer all your questions on funding your college education. Read here, some important excerpts from the webinar.
Do you often think of how studying in your dream university would have been easier if you had more resources to fund your higher education? Careers360 hosted a session with Prasant Bhonsle, CEO and Founder, Kuhoo Edufintech, to answer all your questions on funding your college education. Read here, some important excerpts from the webinar.
Many students could have done wonders with their talent had they got the opportunity to study abroad. A lot of students who desire to study abroad are unable to do so, in most cases, because of financial constraints. In the last 8-10 years, however, parents in India have become more aware of the rising costs of education, and often begin planning for their children’s education much earlier. This is a good thing since it saves a lot of trouble. It helps children to pursue their study abroad dreams without having to eventually give up on them owing to financial reasons. Hence, things have changed for the better.
In a session hosted by Careers360, Prashant Bhonsle, Founder and CEO, Kuhoo Edufintech answered all frequently asked questions about funding one’s college education. Here are a few excerpts from the webinar, you would not want to miss.
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The number of students, as well as the number of colleges, has increased, and the cost is going up drastically. Hence, it is important to plan since the cost of education has increased by 10% every year, over the last 15 years. The cost of education is going up rapidly and perpetually growing.
For education abroad, the cost is very high today.
Broadly, the components of education are tuition fees, living expenses, medical emergencies and other miscellaneous expenses. About 70% here is the tuition fees for higher education, 20% are living expenses, 3% are for medical emergencies and about 2 % are other miscellaneous expenses.
How do students get funds for their education? Following are some of the sources:-
Hence, a big chunk of this finance often comes through loans. The gross enrollment ratio of 18-23 year-olds applying for higher education abroad is 30%, and the reason the other 70% don't do that is because of financial hindrances.
There are different ways for parents to fund their children’s college education.For students who keen on funding their own education, internships are a good way, since they may help the student monetarily, while also providing exposure and on-the-job training. Then, there are also assistantships, par- time and full-time jobs, and student loans.
There are basically two kinds of scholarships: merit-based scholarships and need-based scholarships.
Merit-Based Scholarships | These require the academic record of the student to be remarkably good and consistent, and very few students receive these scholarships.
Need-Based Scholarships | These are provided by the government under state government schemes, to students who come from low-income families. The main challenge with these scholarships is that many of the eligible and deserving students are not aware of their availability, and hence remain deprived of these benefits.
Private Scholarships | Many universities run their own scholarship programmes and so do many corporates (Tata, Kotak Mahindra, etc.).
So, it is advisable that students do a thorough research about the available internships and the processes to apply for them.
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What kind of employment opportunities are available for students on-campus? With the industry changing rapidly to become more flexible and accommodating, there are several on-campus employment options available for students, both in India and abroad.
Students may look at becoming Teaching Assistants (TA) or Research Assistants (RA) wherein they assist professors who are pursuing research, and earn on an hourly or weekly basis. Some other choices are to become a Graduate Assistant (GA), or Resident Assistant (GA).
Students may seek internships with corporates or bookstores, become tour-guide operators, and the likes of these.
For off-campus options, students may consider Optional Practical Training (OTP), Curricular Practical Training (CPT), Severe Economic Hardship (SEH), and International Organisations or Multilateral Agencies (ADB/WHO/IMF)
Financial awareness of Indian parents and students has gone up significantly. A bigger number of people have begun investing early on in mutual funds and insurance plans for funding their children's education. Even then, how and why do the costs of education go up so rapidly? Let us explore a few reasons:-
Most educational institutions have large campuses with start-of-the-art infrastructure. Then these institutions have hefty salaries to pay to faculty and other staff. These costs are indirectly incurred by the students, who are charged enormous amounts of fees.
Owing it to Covid, Europe and America are witnessing the highest inflation in the last 40 years, and India in the last 15, which is clearly causing education costs also, to go up.
Another reason for increasing costs of education is currency depreciation. Due to currency depreciation, the course cost after conversion also goes up, which is also currently the state and likely to remain so.
Even if a family or parents can afford to pay the education expenses, it is advisable to take at least some student loan. There are four primary reasons for it:-
Becoming Independent | Taking an education loan and striving to repay it is a student’s stepping stone towards independence and self-reliance.
Save Parents’ Retirement Money | Every time the cost of education goes up, our parents are compromising their future retirement plan. They use the money from their retirement funds to fund our education.
Positive Credit Score | Taking an education loan helps in building a positive credit bureau history, which is nowadays held important for recruitment by many companies. It helps them to understand the level of integrity and financial behaviour of a prospective employee.
Income Tax Benefit | All the interest paid on your student loan is exempted from your taxable income and has no fixed amount like a home loan does. This also applies to your co-applicant. For example, if you pay an interest of Rs 10,00,000 a year, the whole amount gets exempted from your taxable income. If your rate of interest is 13-14%, the effective rate of interest will come down to 3-4%.
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The two fundamental questions that always pop up one is contemplating a student loan are: “Will I get a loan or not?”; “How much loan will I be able to get?” So, what criteria should you keep in mind while looking for a student loan?
Collateral | Many banks, especially public sector banks, will ask for collateral if the loan is more than Rs 7,50,000.
Processing Time | You also need to take care of the processing time. Even today, in India, taking a loan is a cumbersome process. Many banks take around a week to six weeks just to get the application completed, and the process involves a lot of paperwork(financial documents, identity proofs, academic records, ITRs, etc). So, planning early is the key here.
Keep Options | Applying to more than one bank or lender is important. Have many options ready because it will be up to you to finalise according to the terms and conditions, and the rate of interest. Never apply sequentially, instead, try many at one time since 99% of the documentation is similar at most banks.
Sanction Time | Loan sanction time is also important. There are some myths around student loans. For example, the fee is to be paid semester-wise but the total cost is, say, maybe Rs 10,00,000, while your first semester’s fee is Rs 2,00,000. When you take a sanction letter of Rs 10,00,000, you will have to pay interest on the whole amount while only taking disbursement on Rs 2,00,000. This is not true. You can take a sanction of Rs 10,00,000 rupees, take only the amount that you require in the first semester, and pay interest and EMI only on that amount. If you have not taken further disbursement, you will not be charged.
It is important to understand that it is not an additional cost if you take a higher sanction. In fact, if you are going abroad, a lot of embassies treat a sanction letter as proof of funds before allowing you a visa. Granting of admission by the university is also impacted because they do not want students to drop out due to financial constraints and thereby cause revenue loss for them.
Eligibility | It is important to find out what amount you are eligible to loan so that you know how much you have to arrange for by yourself.
Admission Confirmation | Many banks do not begin the loan application process if you have not received a confirmation letter from your university by then. Although a few banks have now begun to process loan applications with no or conditional offer letters, it is always good to have clarity.
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Most Indian students prefer going to the US for education, than any other country. While the US offers some of the best and prestigious universities to its students. As for an Electrical and Electronics engineering course, 139 universities of the US were ranked by the Times Higher Education World University Ranking of 2024. Let’s look at these top 10 universities from the US for Electrical and Electronics engineering.
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