By Suneet Singh Kochar
Presently, industries worldwide communicate in a language that is diverse, adaptive, and consistently evolving. So, to keep up with the competitive times and succeed in this unified space, students turn towards overseas education, wherein a progressive course communicates with the student’s aspirations.
However, when a student dreams big, they also have to answer the question of funds and fortitude. Herein, the availability of sufficient financial resources and students’ capability to live beyond the comfort of their homeland is under scrutiny.
Overseas Education Students
It is to be noted that the story woven by facts states that there has been a positive surge of 17% in the last financial year for education loans as per the Reserve Bank of India
In this regard, the data provided by the Ministry of Finance in Lok Sabha mentions that in the fiscal year 2022, there has been a 68% increase in the amount of disbursed education loans for studying abroad when compared to fiscal year 2021.
Thus, the data only suggests the determination of students who are more than willing to become self-reliant in their approach toward education abroad.
Parents and Student – The Irony of Perspectives
On the one hand, the parents take the front seat, believing themselves to be responsible for not just their child’s needs but their dreams of studying abroad as well. So, they chart out their income and assets to accumulate the required financial resources.
In doing so, the approach can be dual, as one family may have the required resources but the other might be struggling to make ends meet. If we look at a middle-class family here, they simply plan to liquidate years of investment and put aside their financial security.
On this end, the prospect of an education loan for studying overseas becomes more promising, and parents become guarantors and may or may not provide collateral. In accordance, it can be ascertained that education loans may help parents secure their financial position, but that does not mean that their liability lessens.
On the other hand, this student who is going for higher education at the international level is conscious of his parents’ dilemma and believes that it is time for them to be responsible for their own academic and professional choices.
To make these decisions, the initial step is shortlisting the university and country to study, which leads to planning funds and considering education loans. This planning in itself is quite distressing and requires critical analysis of available monetary resources that will help bear the cost of tuition fees and living expenses.
It is here that the student turns towards an education loan and decides upon a rational loan amount. But while considering this amount, it’s significant to make note of their own and parent’s repayment capacity.
Since, there could be a scenario where the student may not find the desired job, and eventually, the parents will have to take the lead and pay the initial instalments, keeping them stressed and liable throughout the academic expedition of the student. Nonetheless, parents tend to keep a silent approach toward all the what-ifs, and the child remains motivated by the “self-made badge”.
The underlying reality of becoming “Self-Reliant”
When one considers themselves self-reliant, they are driven to be more diligent and take ownership of their education overseas, knowing that their parents are supporting them. The decision requires them to be aware of the competitive and unified market
In doing so, the option of an education loan has not just given them hope but has supported them with the required monetary resources. However, it is crucial for both the student and parents to have open discussions about financial responsibilities and potential risks involved in taking on student loans for study abroad plans.
Education Loan Tax Benefits
Another integral aspect to be considered is that parents as a major figure in the whole education loan infrastructure, benefit from the tax deduction policies of the Indian government. Under section 80E of the Income Tax
Conclusion
We are on a two-way road here, where in the context of education loans, parents’ stress is linked with the fact that more often than not, either they pledge their assets or a fixed deposit as collateral, which is their financial security. Further, students’ reliance
Education loans, hence, can help children focus on their dreams without the financial burden, allowing them a flexible repayment option and low-interest rates, enabling them to get the most out of their study abroad opportunities, while their parents in the supporting role remain liable for the terms and conditions of the loan.
(Author is CEO, Fateh Education)