Education Loan: How To Deal With The Load

With strict repayment terms, higher education is a costly proposition, says Suyash Desai.

- Suyash Desai

Foundation stone for a good career is higher education from a decent university. But it doesn’t come cheap. Aspiring for learning in a decent university is an expensive affair. Education loan is an option, but one often ends up paying high equated monthly installments (EMI) from their salary for more than a quarter of their earning life. It becomes a cumbersome exercise. Studying in an Indian university on educational loan and repaying it over a certain period of time is still manageable. But if a foreign university graduate has returned to India due to any unseen consequences or lack of opportunities, then the EMI becomes unbearable.

Roma Malkar, 23, an associate in the fund service team with SS&C GlobeOp Financial Services India (Private) Ltd, had selected the UK for her higher education.

The amount of loan sanctioned for her course in Masters in Science in Banking and Finance was ₹20 lakh and she started repaying it after returning to India. “More than 85 per cent of my salary goes in EMI and I still have to depend on my parents for pocket money,” she says.

In spite of a modest interest rate discount which a girl child can avail, the interest rate regime is quite taxing for her, she says. (See Chart: Getting Dearer)