Higher education – especially professional courses – is not only costly, but the higher than the normal rate of inflation would also make it out of your paying capacity by the time you or your child get the admission. So, many aspirants need to borrow to fulfill the dream of higher study in desired courses from the top institutions.
The rupee devaluation makes higher studies in foreign universities even more expensive, resulting in need of more funds.
However, apart from education loans, there are also other ways to fund your higher education, which would eliminate or reduce the need of borrowing.
“In the modern day and age, higher education is costly. Students often have to rely on loans to finance their learning. It is, therefore, imperative that they learn to plan and manage their finances so that they can pay off these loans without it being overwhelming for them and be Atmanirbhar in the true sense,” said Prashant A Bhonsle, Founder of Kuhoo Fintech.
Bhonsle lists some steps that students can take to make their planning efficient and be closer to financial independence:
Assess your financing needs and future earning potential
The 3 important sources for funding one’s higher education:
- Savings/ Investments
It is important to have an approximate estimate of your financial needs which may include tuition fees, and other expenses like lodging and supplies. The shortfall between funds available and your requirement can be met through a loan. You must consider a realistic approximation of your future earning potential after pursuing the said course, to ensure you are able to afford the EMI on your student loan.
Be on the lookout for work opportunities to supplement your income
Whether you may or may not be able to afford the monthly repayments of your loan, making some money in the present is always advisable than relying on your future potential. Hence, one should leverage the multitude of opportunities of internships/ project work/ part time teaching jobs/ research assistant job options to not only earn money but also enhance your expertise in your chosen field. Many masters/ post graduate programs across the world offer these options to help ensure that aspirational students are not impeded through financial constraints.
Make sure you choose the right loan prospect
Choosing the right financial product requires research. While making this choice, you may want to look at parameters such as interest rate, moratorium period, consolidation options, and repayment plans. The best option would be sources that offer the lower annual charge per lac of the loan amount disbursed, have the longest moratorium periods, and have shorter but the most distributed repayment plans.
New age Edu Fintech Companies like Kuhoo allow students opportunities to take loans without collateral and co-borrower through easy, quick and end to end online processes.
Out of every 100 eligible students in our country, only 27 enroll for higher studies. Compare this number to 77 in Russia and 84 in the US. Since, cost of education is one of the main reasons for this drop, Kuhoo has created Atmanirbhar loan products for students opting to study in India.
To conclude, being prepared in advance can save you a lot of emotional and financial turmoil Conventional wisdom says not to take loans but some loans are good.
There are three distinct benefits of taking student loans, even if your parents/family can afford the costs of education:
- Taking your own responsibility
- Saving your parent’s retirement money
- Building positive credit history and score while studying which helps one get cheaper loans in future
“Hence, be judicious in your planning and diligent in your execution to build a successful and financially independent life for yourself,” said Bhonsle.