Student loans promise a brighter future, but repaying is not all that easy, find students. Asha Sridhar reports

When Srikalyan T. applied for a student loan to pursue a course in 3D-animation and visual effects in Canada way back in 2007, he had a tough time convincing the bank that he would be able to pay back the loan. Santhoshi Bala had to convince not just her bank, but also her family that going to an expensive arts school would be worth it.

B. Aswin, spent seven months researching his options, and had to haggle with his bank for close to three months before his loan was sanctioned. Even if R. Ajai took a loan of Rs. 20 Lakh, which is the ceiling amount, it would still not cover the tuition fee of his course in an American university. And, yet all of them, 20-something, decided to take the big leap and get their feet muddied in debt. Huge debt.

The weakening rupee (against the dollar), stricter visa regulations and increasing cost of tuition fees, have not deterred young students from taking upon themselves, what can be safely called a colossal financial burden.

“I did a lot of research and found case studies where people were able to repay the loans. Every Indian student who goes abroad to study takes the risk and when you get admission in a reputed university it is foolish to give it up,” says Ajai, who is going to Northwestern University, Chicago.

The pressure of having to repay the loan, however, would close a lot of windows like opting for an unpaid or low-paying internship in a reputed organisation, which might translate into a well-paying job, he notes.

Kavitha Bhatt, Branch Manager, Edwise International, says that 95 per cent of the students who apply through them avail of loans to fund their education.

“Around 40 per cent of students do not take up the course for various reasons, one among which is that they are unable to arrange for funds. Many also miss their scholarship deadline,” she adds. As important as landing a lucrative job may be, the hero in their stories is the “global exposure” they will get, the people they will meet, and the things that they will get to do.

While the US still continues to be a student magnet, the number of students going to the UK has come down marginally after visa norms became stricter last year.

“Though the numbers may have gone down, it is hard to put a number on it. Finding a job in the UK is still possible, just that it has become more difficult,” says Nim Bahadur, Manager, Education, South India, British Council. The British Council, universities and other parties, he says are trying to talk to the government to ease the norms.

Aswin, a student who is pursuing a degree in law in the UK says that though the exposure has been great, he is living the tough life of an immigrant — doing odd jobs, walking long distances instead of taking public transport, skipping some meals, and balancing work and a tough course.

“I came here with the belief that I could work part time and manage my living in the city. I did work in some stores. However, the living expenses here are very high and you will end up spending in thousands just to move around the city,” says Aswin.

On how the weakening of the rupee has affected the number of students going abroad to study, T. M. Bhasin, Chairman and Managing Director, Indian Bank, says, “There is no significant change that has come to our notice. However the quantum of loan required by student borrowers has gone up because of Forex variation.”

He adds that the quantum of educational loan outstanding for those studying abroad has gone up from 7.79 per cent (as of March 2010) to 9.47 per cent (as of March 2012).

The falling rupee is a cause for concern and cheer, says Vijay Murali, who recently graduated from Georgia Institute of Technology, Atlanta. Currently working as a user interface design engineer in the US, he says: “It is a concern for people joining now or in the future and good news for people who are repaying their loan. I paid Rs. 47 to the dollar when I took my loan and it's around Rs. 55 now. That's something I can't complain about.”

Kavitha notes that the number of students from smaller towns across the State is rising exponentially. “The numbers in Chennai remain the same, while increasing number of students from places such as Erode, Salem, Karur, Nellore, Namakkal and Tuticorn coming to us over the last five years.” And, most she says, as is the trend in south India, opt for technical courses. “Almost everyone pays back their debt,” she adds.

According to the United States-India Educational Foundation, the number of students from India in the U.S. has been steadily above 100,000 since 2008 as compared to the numbers in the 1990s (33,000-42,000), the 1980s (14,000-26,000) and the 1970s (10,000-11,000).

In a 2011 poll published by the Institute of International Education, the U.S. was voted the most desirable destination for higher education by an overwhelming 90 per cent of Indian students considering study abroad, according to USIEF.

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