In an exclusive interview, Sunit Gajbhiye of Financepeer shares his views on the rising education costs and how their company helps parents pay their child’s education fees in easy installments.
Written by Sanjeev Sinha
Students should keep the provision of top-ups to the loans in case of emergency needs.
Planning for higher education should begin as early as possible with an ideal time-frame of 6 to 8 years in advance. Ideally parents or students should have some savings to finance their education. In case students have to go for educational loans, they must thoroughly explore all the available options in the market, says Sunit Gajbhiye, Co-Founder & Chief Business Officer, Financepeer, a leading player in the education fee financing segment.
In an exclusive interview with Sanjeev Sinha, Mr Gajbhiye shares his views on the rising education costs and how their company helps parents pay their child’s education fees in easy installments. Excerpts:
How are the rising education costs affecting the budgets of parents? The need for tuition fees and extracurricular activities is on the rise, which also has a huge cost implication.
In the past few years, the cost of education has risen significantly; however, the income of people has not risen correspondingly. This has had a huge impact on the parents’ budget and they are forced to compromise with the quality of education for their kids. It is evident from the fact that around 40 lakh kids shifted from private schools to govt schools during the pandemic. In the modern schooling system, extracurricular activities are an important component of education. This puts an extra burden on the parents’ pocket as such activities have to be paid for besides tuition fees.
How should parents plan the cost of their children’s education?
For school education, not a lot can be planned too much in advance. Most schools, especially in tier 1 cities, collect the school fees either quarterly, half-yearly, or sometimes annually. This sometimes becomes problematic for the parents. Parents can opt for fee financing and convert the school fees to cost-free EMIs that are easier to pay off. However, for the higher education of their kids, parents should start as early as possible and diversify their investment portfolio so that financial arrangements don’t appear monumental when the need arises.
Higher education planning takes place much in advance. What are the most effective ways to plan the future education of children?
Generally, the cost component of higher education will remain higher irrespective of the field of study. So, the planning for higher education should begin as early as possible with an ideal time-frame of 6 to 8 years in advance. Students and parents should first decide on which course, university or destination they want to take on. After that students should check their eligibility for scholarships, fellowships and university grants. Ideally parents or students should have some savings to finance their education. In case students have to go for educational loans, they must thoroughly explore all the available options in the market. Students should also keep the inflation at their destination for education and the rupee value. Students should keep the provision of top-ups to the loans in case of emergency needs.
How can fee financing create a multiplier effect for parents to increase the return on their money?
Mostly, education institutions collect fees either quarterly, half yearly or annually, depending on their policies or nature of studies. The fee financing facility enables parents to pay the education fee in EMI without any additional cost. Thus, the funds which are to be used for paying fees upfront can be invested in some other investment instruments such as stocks, gold, Mutual Funds etc. that can provide returns on the investment. This is a smart way to multiply the investment and extra income generated can be used to earn more.
What are your company’s plans for the future?
Financepeer has achieved a leadership position in the education fee financing segment. With a network of over 10,000 institutions and 2 million students, we are witnessing an exponential growth on the month on month basis. We are already operational Pan India and are now penetrating to tier 2, 3 cities and beyond. We are also launching several innovative products to strengthen the education ecosystem. The Financepeer platform envisages making education accessible to the masses and looks forward to spearheading a revolutionary impact for millions of people.