How to fund your overseas education

In 2000, Professor Rao, a principal of a renowned college, faced worried parents on a regular basis who approached him with a request to grant some time to arrange for funds.

The outcome? Professor Rao made them aware of the information of education loans, scholarships and other schemes available with banks and on the Internet.  

In 2004, Finance Minister Mr. Chidambaram mentioned in his budget speech "No student admitted to any professional course will be deprived of the opportunity to study because of lack of funds."

The coutcome? 140,000 loans were sanctioned amounting to Rs 2249 crores compared to 108,000 loans amounting to Rs 1983 crores in the year before.  

These scenarios indicate one basic point: awareness.Yes, good-quality education is not cheap, thus putting tremendous strain on the ordinary middle-class parents' budget. However, one needs to be aware of the various funding avenues or cheaper options available to a student. There are quite a few options to choose from rather than feeling the pinch in your own pocket.

Funding avenues are commonly in the form of educational loans from nationalised and private banks or scholarships and bursaries from universities.

Why educational loans?

• No deprivation of opportunity to study due to lack of funds

• Education loan schemes offer repayment either one year after the end of the cours or six months after getting a job, whichever is earlier

• Tax benefit to the parents under section 80E of the Income Tax Act

 Who provides education loans?

Most scheduled nationalised and co-operative banks offer educational loans to students under the Educational Loan Scheme. Few private banks like, HSBC have launched educational loan schemes in the recent past.

How to obtain an educational loan?

Shortlist the courses you want to pursue based on a career assessment by a professional career advisor. Once you've done this, research the courses and institutes so as to obtain a rough estimate of costs involved. Then, check with the institute about educational loan tie-ups and scholarships schemes.

Research and shortlist lenders well before results are announced. Check if your course or institute is recognised by the bank. The best option is to leave it to a consultant, who has experience in this matter. Remember to:

• Keep all the documents ready so that delays are avoided
• Opt for a loan only for the amount needed so that your repayment burden is reduced
• Get a life insurance policy in your name. Many banks ask for an amount equivalent to the loan amount as security
• Before submitting the documents to the bank, photocopy all the forms and show them to the concerned bank officer. This will minimize any error that may delay the disbursal process

 Education, it needs to be remembered, is a big investment of time, money and effort. One must be prudent..

 An alternative option

In spite of having earned a scholarship, *Mohit was still having sleepless nights thinking how to arrange for the balance amount of the tuition fees. He had approached a number of banks for financing his higher education, but to no avail. Till he met a friend who asked him to go to a consultant.

He walked in to a consultant's office and new world emerged in front of him. He can still do the same course from the same country but at nearly half the expense.

Today, *Mohit is a successful business executive and still thanks the consultant for changing his life.

What the consultant did was pretty simple. He admitted him to a college under the same university instead of the university directly. Presently, there are quite a few consultants who can reduce your academic expenditure by offering options such as this. One has to be flexible enough to pick up the right one.

Conclusion

Venturing for overseas education needs courage; it needs conviction; it needs sincerity of purpose. It needs commitment, creativity and hard work. Young people from many different walks of life take up this challenge every year. Remember, the choice is yours.

*The original name has been changed in order to maintain confidentiality.

Part I: Why you sould consider an education overseas

Chat with Raj Ganguly today, at 3 pm, for International education advice and financial tips.