1. What is the best way to finance higher education?

Some of the common ways of funding higher education is through using family savings, borrowing from friends and relatives, selling assets like land, gold etc. or taking an education loan . Earlier, it was believed that only people from the middle-income group choose to fund their education through student/education loans. With benefits of an education loan coming to the fore and specialists like Credila offering doorstep service, many affluent families are also opting for an education loan and availing of exclusive benefits like:

• Income Tax benefits under section 80E of IT Act
• Opportunity for students to take their own financial responsibilities
• Preserving their family savings
• Building a good credit history

Hence, education loans have clear advantages over using personal finance

2. Who should opt for an education loan and why?

Ans: Usually, middle-income group people apply for education loans. However, because of:

• 1. Rapidly rising costs of education
• 2. Income tax benefit under 80E of IT act
• 3. Students wanting to take their own financial responsibilities to preserve the parents savings
• 4. build positive credit history

Even affluent families are going for education loan

3. How is the economic scenario affecting the loan market? Fewer loans to hand over or fewer loans to take?

With such a young population and one of the largest pool of students coupled with rising cost of education is only fueling the demand of education loans in India

4. Big schools abroad – their fees are sometime Rs 50 lakhs too. ISB in India is some Rs 20 lakhs plus. Since you have slabs for both the domestic as well as international loan seekers, how do you think people should go about financing their education?

We believe that going forward the education finance will largely consists of:

• 1. Self-finance – Using parents savings, liquid assets etc.
• 2. Scholarships & grants – Though in India the availability is quite limited, for meritorious students this may form a good chunk of the entire cost
• 3. Education Loans – Rising costs, to minimise financial burden on the aging parents and tax benefits are three major reasons why more and more students and families are opting for loans of education

5. What if the person has enough money in the bank? Is it advisable to take a loan or better that he uses his money?

Yes, they should avail loan even if they have money. The reasons are explained in earlier questions