Education
loan in India is still a modern concept, opted for by students with proven
academic record
With rising
cost of higher education, loans are becoming a key source of funding for those
who want to get into top-notch institutes in India and abroad. Higher education
is a Rs 80,000 crore market. And education loans for them are a Rs 13,000 crore
space that's growing at a fast clip. While the majority of courses opted by
aspirants are the usual MBA and medicine degrees, students are increasingly
showing propensity to try out new vistas.
Education loan in India, unlike abroad, is still a very modern concept and is
opted for by students who have a proven academic track record. These students
are very confident of paying back the loan once they are employed after
completing their course in India or abroad.
Indian students are the second largest group of international students in the worldwide higher education market today. Combined with this, the rising costs of higher education and the Indian rupee’s slump in global markets have resulted in expanding the demand for education loans for especially foreign studies.
Specialized players
All the public and private sector banks are providing education loans. A few education loan specialists have also emerged -- Avanse promoted by Dewan Housing Finance (DHFL) and Credila promoted by HDFC. Among the banks, State Bank of India is a major player in funding education loans along with other large PSU banks. Neeraj Saxena, CEO, Avanse education loans said, “Every year spending on education is rising at 10 per cent to 15 per cent, higher education spending in India is around Rs 80,000 crore, at present, of which 15 per cent to 16 per cent is funded through loans.”
Education loan is becoming crucial for funding studies abroad as well as for highly sought after courses in India. As per latest data, 3.5 lakh students go abroad for higher studies every year. Of this, 2.5 lakh go to the US alone. “The total spend on pursuing masters degree in the US for an exceptionally bright student is around Rs 25 lakh ($37,593 at current rupee-dollar rate of 66.5), and the cost for MBA course in India is around Rs 16 lakh to Rs 17 lakh. “The education finance business in India has grown at the rate of 30 per cent CAGR over the past five years from Rs 15,200 crore in 2006-07 to Rs 50,300 crore in 2011-12,” Saxena said.
With India’s youth showing high degree of maturity in terms of what they would like to pursue as a career and how they would like to finance their higher studies towards that goal, students themselves are involved in loan application and processing these days, thanks to information available on line and growing role of education consultants in guiding students to a right course and university, Saxena added.
Specialist education loan providers like Avanse are also prospecting students who would need Education loan for MBA from them in future by forging a relationship with around 400 educational institutions and 600 education consultants within the country as well as abroad.
“The number of students pursuing higher education in India and overseas has been growing year on year despite uncertainties in the economy and the rupee’s depreciation against the dollar, pushing costs up by 20 per cent to 30 per cent,” said an official from Credila.
Indian students are the second largest group of international students in the worldwide higher education market today. Combined with this, the rising costs of higher education and the Indian rupee’s slump in global markets have resulted in expanding the demand for education loans for especially foreign studies.
Specialized players
All the public and private sector banks are providing education loans. A few education loan specialists have also emerged -- Avanse promoted by Dewan Housing Finance (DHFL) and Credila promoted by HDFC. Among the banks, State Bank of India is a major player in funding education loans along with other large PSU banks. Neeraj Saxena, CEO, Avanse education loans said, “Every year spending on education is rising at 10 per cent to 15 per cent, higher education spending in India is around Rs 80,000 crore, at present, of which 15 per cent to 16 per cent is funded through loans.”
Education loan is becoming crucial for funding studies abroad as well as for highly sought after courses in India. As per latest data, 3.5 lakh students go abroad for higher studies every year. Of this, 2.5 lakh go to the US alone. “The total spend on pursuing masters degree in the US for an exceptionally bright student is around Rs 25 lakh ($37,593 at current rupee-dollar rate of 66.5), and the cost for MBA course in India is around Rs 16 lakh to Rs 17 lakh. “The education finance business in India has grown at the rate of 30 per cent CAGR over the past five years from Rs 15,200 crore in 2006-07 to Rs 50,300 crore in 2011-12,” Saxena said.
With India’s youth showing high degree of maturity in terms of what they would like to pursue as a career and how they would like to finance their higher studies towards that goal, students themselves are involved in loan application and processing these days, thanks to information available on line and growing role of education consultants in guiding students to a right course and university, Saxena added.
Specialist education loan providers like Avanse are also prospecting students who would need Education loan for MBA from them in future by forging a relationship with around 400 educational institutions and 600 education consultants within the country as well as abroad.
“The number of students pursuing higher education in India and overseas has been growing year on year despite uncertainties in the economy and the rupee’s depreciation against the dollar, pushing costs up by 20 per cent to 30 per cent,” said an official from Credila.
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