Thiagarajan was flipping the pages of a national monthly magazine. His eyes caught the sight of something and he was intently scanning the contents. Fifteen minutes on, he was still reading that article for the nth time. Worry creases formed on his forehead. Shyamala, his wife, came into the room, and was surprised to see that he had not touched his coffee. She chided him for letting it get cold. Wordlessly, he handed over the magazine to her. Now it was her turn to intently pore over the piece. She quickly went through the piece. Now she sat down on the sofa and again started to give the article the once over.

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“It appears difficult to send our children abroad after all,” she said. Rajan nodded. The article they had read had given out the costs of education abroad. That looked daunting to them… they being from the middle class with limited means.

The article had talked about an amount of Rs 80 lakh-Rs 1 crore for a two-year post graduate course. For two children, that’s about Rs 2 crore, just for their PG education. The article had punctured their aspiration of educating their children abroad.

For millions of middle class parents, an education abroad is seen as a passport to a good life. Educating children abroad has become a trend these days. There are reasons for it and hence cannot be summarily dismissed as a passing fad.

One of the reasons is that it is reasonably easy to get admission in a course of one’s choice in a good college abroad than in India. Secondly, the quality of education, especially the quality of faculty, facilities & flexibility in terms of course choices is really good. Thirdly, there is an aspiration to work & settle abroad which would be more easily facilitated this way.

But costs do come in the way. Keeping aside a couple of crores just for higher education is not easy for most. This is but one goal. There are multiple goals that one needs to contend with — a home to live, children’s education & marriage, functions/ events throughout life, vacations, cars, retirement funding etc. Also, the regular expenses throughout life need to be met as well. That is why foreign education funding becomes a challenge for many.

Some of the parents are far more ambitious. Some want to send their children abroad for graduation itself and there are others who want to send after SSC. These are infinitely more difficult.

Fortunately, there are three ways in which the education costs abroad can be paid.

Education loan:

The student can get a loan for studies abroad for up to Rs 50 lakh, which can be paid back in about eight years. This substantially helps the parents to bring down the amount they will have invest for education. Also, this shifts some responsibility to students’ shoulders, which is desirable and would stand them in good stead.

2. Scholarship: This works especially if the student is a meritorious pupil. Many children from India are able to get scholarships. If they continue to do well while doing the program, they will be able to get scholarships for a big chunk of the tuition fees. This certainly helps as tuition fee is one of the big components of the overall outlay in foreign education.

While choosing colleges, one needs to be practical. There are colleges which may grant scholarships somewhat liberally & there are others who either don’t offer any or offer a rather modest scholarship. In the interest of bringing down the costs, one needs to consider colleges which are liberal with scholarships, even if they may be somewhat less prestigious.

3. Earn while you learn: Opportunities to work while they are pursuing their programs exist in many countries. Even a 20-hour work per week can pay for all their stay & incidental costs. This will substantially help in making education abroad affordable.

Rajan and Shyamala can breathe easy. It is possible for them to fund their children’s education abroad, if they look beyond making it possible just by their own funding.

Parents want to fund the entire education and don’t want to burden their children. That is idealistic and not practical. Parents need to factor in all these options while funding their child’s education. Only then, education abroad will become viable. Else, parents will overstretch and draw down from their retirement corpus, which is the last thing they should be doing.

The author is the Principal Advisor and founder, Ladder7 Financial Advisories.

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