‘Papa, I don’t want to go to that university. They don’t even have a Wi-Fi campus and their website sucks’
First, a disclaimer. This story is not about money. It is not about the value of education either; nobody contests that. Among the hierarchy of needs in India, education comes foremost. We will sell our homes, if need be, to fund our children’s higher studies. I for one have always believed that going to university is an important phase of growing up. Apart from studies, the friendships made, life lessons learnt and social graces imbibed can never be achieved sitting in front of a screen or doing Coursera. This story is about options, making parents & students think about alternate solutions and seeing through the smokescreens that dubious educational institutes create to build the hype around college education. As a parent of a young man about to attend university, I am just raising a basic question – Who should pay for your higher education?
Again, it’s not about whether you can or cannot pay. It’s about who should pay.
It is that time of the year when parents indulge their children in ‘education tourism’ (Surprisingly, in India, even at 18 years, we still refer to them as children). Running pillar to post from one university to the other, filling out forms, ferrying them to ‘early bird’ selections and counselling sessions, signing off some big cheques and then wistfully seeing them go. Not the ideal setting for asking the moot question in this story, but let us proceed.
Every year in India, approximately 25 million students and their parents fan out in search of higher education. We are the third largest higher education system in the world after US & China, with over 700 degree-granting institutions and about 35000 affiliated colleges at last count. The India Brand Equity Foundation (www.ibef.org) estimates that the Indian education market is currently worth US$ 100 billion of which, higher education contributes about 59.7 per cent of the market size. That’s a staggering number. However, the number of universities and institutions of repute are woefully inadequate thereby creating almost impossible entry barriers for a vast majority of the student population. Acclaimed artist Manjul captured it perfectly in his cartoon below!
Incidentally, the institutions of repute are also some of the most affordable institutions in the country. But it’s terribly, terribly hard to get in there and consequently, a veritable cottage industry of coaching classes have set up parallel colleges to woo aspirants. We are not going to discuss those who make it through this cruel system to premier IITs and IIMs. With a heavy heart, in this discussion, we are also going to let go of the underprivileged sections of our society for whom survival itself is a big challenge. For a moment, let us focus on a section of student population extending from the ‘aspirational’ middle class to more affluent sections of the society; millennials born to families like ours in the age of smartphones and laptops. We as parents provided them every creature comfort and always walked that extra mile to make their life comfortable. They enjoyed public schools, private tuitions and exclusive clubs all along. Now it’s time to send them off to university. And they have big plans. You’ll be signing the cheques.
Let us examine the options we have.
Financial Aid? At undergrad level, scholarships are rare. The website of a prominent private university makes it clear that students who require financial aid must submit their parents’ income tax returns, details on gross annual income of all earning members in the family, their assets, and also the number of dependents when filling out their application. There is an assurance that a student who has ‘earned’ admission to the university will not be turned away if they are not able to pay the fees. Tough luck, dad! You don’t qualify.
Government? The BJP government under Prime Minister Modi and HRD Minister Smriti Irani is focussed on improving the Gross Enrolment Ratio to 30% by year 2020 and providing opportunities to socially deprived sections of society. Sorry you don’t qualify here either!
Bank Loans? For those of us who cannot ‘afford’ our children’s higher education fees, universities have student loans tied up with leading banks. At an average interest rate of 12%, repayment period of maximum 15 years and a ceiling of 10 lacs with collaterals like a house mortgage, will you be interested? Assuming you do, please work out the EMI after the moratorium period which could be anywhere in the region of 12-15k per month. That’s almost 50-75% of the starting salary as a graduate even if you graduate with an engineering degree. Add housing costs (Delhi without AC?? Are you kidding?!), transportation, food (remember, you cultivated their taste buds with fine dining experiences!) and the calculation falls through. Tough luck dad, but YOU will have to service the loan for me!!
Mom & Pop Model? Ah! Now we are on familiar territory, aren’t we? Turns out, ‘I cannot afford it’ is no longer a valid excuse as nouveau riche parents, a segment to which large majority of those reading this post belong. When you can buy one apartment each in Greater Noida & Mohali, a premier golf club membership in NCR and a luxury sedan, why can’t you shell out for my education, eh? No relief here too, dad! Nobody told you education is an asset? Aw, C’mon!! Write out those cheques please!
Work your way through College. We all love America and all that it stands for, right? Freedom, equal opportunities, fast food, Big Apple and the Silicon Valley. No discussion in a middle class Indian household with teenagers is complete without bringing in the comparison of ‘if this was US, it wouldn’t have been so’. OK, then let’s talk business.
I am told, in the US, students have to work their way through college. Meaning, they take out huge education loans with the promise of repaying it after finding a job. Try offering that solution here in India. Chances are, your offer will be rejected outright with a ‘C’mon papa, this is not the US! What job will I possibly get with just an undergrad degree?! For that, I have to finish my post grads!’
Oh…OK! This is just the beginning. Apparently, there are more cheques to be signed.
Welcome to the great Indian middle class university conundrum!
With a burgeoning middle class and over 25 million millennials added to the ‘university bandwagon’ every year, it is no surprise that entrepreneurs have turned higher education into a thriving business model. Corporate jargon like ‘consumer’ and ‘service provider’ are easily bandied about. Facilities & infrastructure have taken primacy over faculty and intellectual quotient. Quality of websites have improved while research output has declined. Liberal, laissez faire education has replaced academic rigour – all crafted to catch the imagination of millennials for whom Wi-Fi connectivity and internet speeds assume equal importance as work and studies. Where there is a market and money to be made, can unscrupulous ‘educationists’ be far behind? Only, in this case the onus of a favourable outcome is on you. Unlimited expenditure with zero guarantee. And guess who is paying for the party? YOU, the over-indulgent Indian parent.
Again, remember this is not the US where students typically take huge loans to fund their higher education and then work their way through college. Even this system is now showing signs of over-heating where ‘unemployed’ or ‘poorly employed’ graduates are not able to service their student loans, thereby creating a huge crisis. Estimates suggest that close to 40 million Americans are reeling under an aggregate student debt of more than 1 Trillion USD!
Isn’t it odd that we sit together as a family in India and enjoy the 9’O Clock sitcom ‘Friends’ or sip cappuccino at Starbucks while we slink away when faced with the choice to have our kids to work their way through college? Just because we can afford it? What lessons will that provide? I am not advocating any particular solution. My only contention is ‘easy come, easy go’ and ‘what is not earned is not valued’. What should be the guiding principle in selection of courses, colleges and higher education funding?
I took a call from an old friend recently. His ward was keen on doing a BBA in some new-age B School in my town and wanted an ‘inside opinion’. Located inside a former Maharaja’s estate, the name and glossies had all the trappings of the next Harvard. As a test pilot, I was not going to commit anything till I ran my tests. I asked for more time to visit the campus, etc. Sure, he said; after all, it was not coming cheap. One trip to the place cleared all imaginary grandeur of a world-class B School. Decrepit sheds and former stables on the Maharaja’s estate made for classrooms. A random collection of second-hand books arranged on few rickety shelves and some E-books hooked up through a Wi-Fi connection made up the college library. The most elegant building on campus was the Reception and waiting lounge where gullible parents were given ‘presentations’ and espresso coffee; and relieved of a small fortune for what was called ‘industry-synergised MBA’ – a euphemism for providing cheap labour to local businesses from Monday to Friday. My incisive feedback had the desired effect as I never heard again from either the B school or the concerned parent. Now, I wonder if I did the right thing. Even if somebody was running a racket, at least those children were ‘working’ their way through college. Most middle class children from India may not start working till they finish graduation or even Masters.
So what does it all add up to? Going to university is a given, at least for people who can afford it. So how do we choose? What metrics to apply? How to make informed choices? Should students in India take loans and work their way to pay for university tuitions like the western world? Or should the party funded by ‘Mom & Pop Inc.’ continue? What lessons and life-skills will each alternative generate?
I am waiting to hear from you. Silence means we pay up 🙂
Image Courtesy: www.wikipedia.org