By Prashant Bhonsle
There is nothing new about Indian students applying to foreign universities. Nearly 300,000 students travel from India each year to pursue international qualifications in colleges and universities across the world. What is interesting to note, however, is a growing shift in the student demography; lately a rising segment of students from tier 2 and 3 cities and towns are aspiring to stand head and shoulders with their urban counterparts.
The world is just a few GB away
Smaller town India is coming of age. First, competitive telecom plans and product pricing put a smartphone in their hands. Then the Government’s Digital India and smartphones opened the world for them, making students smarter. Their aspirations have skyrocketed; access to the world through the net has resulted in young students from tier 2 and 3 cities and towns shifting from metros in India to a more global focus. An international qualification not only improves their career prospects, it also raises their family’s living standards and status. Determined to attain their goal, these students are even fighting traditional mindsets that are credit averse and opting for education loans.
The Challenges Of A Bank Loan
While an educational loan from a bank seems to be the obvious option, the application process is daunting. Bank loans mandate stringent blinkered and often, complicated paperwork. This means numerous branch visits which translate to significant down-time for students focussing on entrance exams and visa interviews. Add burdensome collateral to this, and the much sought-after dream ends up as a debt-ridden choice that is borne by the family.
New Age Lenders Have Simplified The Process
The market for education loans is today worth over Rs 80,000 crore. NBFC lenders have begun to realise the multiplier effect of supporting the growing ambitions of aspiring Indian students from tier 2 and 3 cities and towns.
Online lenders like InCred have simplified and streamlined the process, to make education loans easy and hassle-free. In addition, the sector has undergone several key transformations, making it more conducive for students to access loans without any tedious paperwork or lengthy procedures. Digital platforms also facilitate coordination between parents and students living in different cities and encourage transparency in charges, interest rates and loan comparisons.
More importantly, new age lenders are building an ecosystem that allows students to discuss and find answers to various unanswered questions regarding foreign education. These could range from choosing the right course to affordable financing options, quality of life in the foreign city to even advice on starting the process.
NBFCs are assisting aspirants from tier 2 and 3 cities and towns to manifest their aspiration of a foreign qualification in manifold ways.
More Than Just Financial Aid
From outdated, tedious paperwork to quick, digitised and efficient procedures, NBFCs have disrupted the status quo. They also possess a detailed repertoire not only of global universities and their courses but also their placement records, which banks lack. These factors have always been a major barrier for students from smaller towns and cities.
The new-age lending platforms deploy scientific modelling that do not rely on the traditional means of credit appraisal, but take into account various dynamic factors related to students, such as past education records, interim test scores, future employability and more. As a result, they are better equipped to appraise credit and provide aspiring students with quick and timely loans.
No More Huge Collaterals
NBFCs have made huge collateral and expensive interest rates a thing of the past. These modern and tech-powered lenders assign more weightage to the profile of the student, making education capital easily accessible for aspirants from tier 2 and 3 geographies. Education loans are being provided even with lower collaterals, or sometimes with none, letting students pursue their dreams across borders, without their parents or themselves feeling burdened.
STEM Gets A Boost
Indian students are a huge draw for MNCs warranting STEM talent (Science, Technology, Engineering, and Mathematics). Foreign companies are eager to pay top dollar for the right talent. Indian students, including those from tier 2 and 3 locations, are the preferred choice for their analytical capabilities that are matched by hard-work and ambition. In a way, education loans serve as seed capital to create the next generation of highly-qualified Indian professionals to build an Incredible India.
By deleting unnecessary complexities and outdated procedures, online education loans let students concentrate on what matters most. The best part is, by appraising students on their past performances and future potential, it raises their confidence and values them as individuals looking to better their future instead of just another file number.
(The author is CEO, Housing and Education Loans, InCred)