Most parents open to loans for children’s higher studies

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Mumbai | Published: June 19, 2016 2:05:02 PM

Nearly three-fourths of parents surveyed in India are willing to take education loan to fund their children's university studies, says a study.

HSBCHSBC’s study found that parents shoulder most of the financial responsibility when it comes to paying for their child’s education. (Reuters)

Nearly three-fourths of parents surveyed in India are willing to take education loan to fund their children’s university studies, says a study.

Moreover, 41 per cent of respondents from India felt that funding their child’s education was more important than contributing to their own retirement savings, the study by HSBC’s Value of Education Foundations said.

The study revealed that 71 per cent of parents were willing to take education loan to fund their children’s university studies.

Parents willing to take loan for their child’s education is the highest among Chinese (81 per cent) followed by Mexico at 74 per cent, the study said.

“The financial sacrifices that parents are willing to make to fund their children’s education are proof of the unquestioning support they will give to help them achieve their ambitions.

“However, parents need to make sure that this financial investment is not made to the detriment of their own future wellbeing,” HSBC India Head of Retail Banking and Wealth Management S Ramakrishnan said.

Of the total number of parents surveyed in India, mothers (45 per cent) were more likely than fathers (37 per cent) to believe that contributing to their own retirement savings was less important than funding their child’s education, the study noted.

The report represents the views of 6,241 parents in 15 countries and territories around the world, including Australia, Canada, China, Egypt, France, Hong Kong, India, Indonesia, Malaysia, Mexico, Singapore, Taiwan, United Arab Emirates, United Kingdom and United States.

The research was conducted online by Ipsos MORI in February and March 2016, with interviews in Egypt conducted face-to-face.

HSBC’s study found that parents shoulder most of the financial responsibility when it comes to paying for their child’s education, and while the majority (70 per cent) fund it from their day-to-day income, many have saved towards it or would be willing to get into debt to fund their child’s university or college education.

While nearly all (97 per cent) parents surveyed in India expected to be the main contributor of funding should their child go to university, over one in eight (13 per cent) expected their child to contribute to funding their own university costs.

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