Who should pay your University fees?

‘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

13 thoughts on “Who should pay your University fees?

  1. Payable when Able Model.

    KPS, most of us have kids who are satisfied lot and lack fire in their belly. They feel they are doing us a favour by studying. Job scenario is also extremely competitive and since we do not belong to any special category the kids have to go through PG for getting something worthwhile. Handholding therefore is common till PG. In western society the kids and parents are not obliged to look after each other. It’s not so here.
    The service class can only give quality education, you do not have a legacy business or a baton to hand over. The problem is of plenty. We give so much, that kids do not value our contribution. They feel so what. I think the logical approach could be one years education we give as a loan, payable when able and second year they take a loan. Pocket money and other expenses they earn. They are allowed to work about 20 hrs in a week in western world.

  2. Hi KPS Sir. As usual, just as the reports of your test flying heydays, the blog has hit the nail exactly on the head.

    I have also just walked this path, so I know what it means and how it feels. I also pity the parents with two or more children who would have to go through this torture again (disclaimer : I am also one of them!)

    Having said that, not signing on the dotted line to pay up for college fees may lower your image in the eyes of your child (also remember, it’s Father’s Day today – so be ready to accept a gift with your own money)

    Knowing the Indian love for knowledge and black money, these institutions have established a well-oiled machinery in place, where you can make cash payments..no signing on the dotted line.

    And this is just the tip of the iceberg.

    Now that your offspring is admitted in college, she or he needs a whole new wardrobe. None of the old stuff can be used again. And even if it could be used, your child would never be seen dead or alive wearing those ‘child-period’ clothes. That’s another hit that your bank account would take.

    For paucity of time and space, I am not venturing into hostel fees payment and other living expenses.

    But be warned, you may actually be paying up equivalent of, if not more, of what has been coughed up as college fees.

    Great read, Sir. You have touched a raw nerve.

  3. Today the smarter ones should become entrepreneurs. In any case after doing iit, they will be running ola, meru, flipkart, housing.com etc. Why engg then. Why not bcom. Your thirty could make them employers rather than employees for life.

  4. You touch on many important issues. I’ll add one more to the mix which is not completely new since it is implied in your article above…the sense of entitlement which is carried over from the home to the university and the workplace. Just as kids feel entitled to have their parents pay for higher studies they seem to expect the university to find them a job through placement services irrespective of how well they do academically. I was somewhat surprised by this as a teacher. In my time there was no such concept. Looking for a job was my responsibility and an education in itself.

    With regard to children’s contribution I would suggest a college fund bank account where kids can start putting in a percentage of their pocket money and any additional gifts of money from grandparents etc from a young age. Might not amount to much but is likely to create a sense of responsibility towards funding their college education. And yes I agree that working part time is important.

  5. In a society where a man works and saves all his life for two things: (a) a daughter’s marriage and (b) a son’s education, this will be a generational issue.The fact is that this particular Titanic has too small a rudder and to turn it around would take a lot of soul searching,hard choices and an attitude change by the younger lot.They admire and crave everything US.But they would be hard pressed to work in the food industry 8-9 hours a day to earn minimum wage.It is common here in the US for kids to go to work at age 16 to finance their car, hobbies, shopping and hanging out with friends.Most parents can afford to indulge their kids but choose not to do so.It teaches the youngsters self reliance, value for money and a sense of accomplishment. Noticeably absent from the minimum wage workforce are the children of Indian immigrants.This group leaves India for a better life and craves the attitudes and culture of their home country!So, sending your child out to work is somehow demeaning and the old saw what -will -people-say is dusted and trotted out again.
    Children need to learn the value,not just the cost ,of an education and also the sacrifices parents make to make it happen for them.The only way to do so, in my opinion, is to model our education system and our children’s attitudes in the American way.Later ,when they spurn you in your old age, at least you won’t be dead broke to take care of yourself!

  6. Very topical post!

    If the young person has got into a a Top 20-30 professional school, the problem sort of solves itself. Yes, the fees are high but banks are ready to give loans and it is almost certain that your ward will get a job that will enable him/her to repay the loan. As a parent, you would of course want to lessen that burden by part paying the loan but don’t let this urge be so generous that you compromise your future. As someone told me, your kids are starting their lives and their incomes will grow; but your income is tapering off and you need to plan for retirement.

    The problem is when kids feel entitled and want you to pay through the nose for colleges and degrees that are basically useless. Unfortunately, many private colleges fall in this category. In such a case, I would not be willing to foot the bill. After all, we are not rich people and no prudent person can afford to chuck money down the drain. In such cases, I would urge my ward to get into the most reputed college he or she can on merit and not insist on the subject of their choice.

    Take an example. A simple B.A. (Hons) degree in a Delhi Univ college costs about Rs 20,000 a year in tuition fees. The same thing at the private Ashoka Univ costs Rs 5.7 lakhs per year! In my view any degree from a Delhi Univ college is better than paying these fancy fees. If even that is difficult, explore other cities where the competition is not so fierce. At least, my ward would then have a reputed univ degree and can sit for PG or other entrance tests later.

  7. Competition makes getting into good institutes difficult. Since education is important we are left with second or third best to choose from…

    More than 80 % of the institution’s are self funded and are hardly 20 years old.. My opinion, when supply demand closes the bad ones will cease to exist.

  8. KPS, u hit the nail on the head no doubt. But then, every logical problem has a solution and every logical question an answer.
    In our case, the basic solution is an overhaul of the pre uni education system.
    Any system where an arts student gets a cent percent or thereabouts score is flawed.
    So the rot starts from the base, education by rote, super high cutoffs and over expectant parents are the root cause which if corrected may lead to a solution I feel.
    The jury is still out

  9. Great read KP. But let’s get real. Changing the education system, social outlook of the middle class, etc are beyond our control. I think the best model is to provide the best education you can afford and groom the child to understand the value of it all by constantly engaging them. No easy task. And there is no silver bullet.

  10. Interesting article KPS!
    It is indeed difficult to push your children through the process of education. If it is a boy then it is only education and if it is a girl then it is education and marriage.May look very backward thinking.But it is reality.

    For a person like me who enjoyed merit scholarship throughout school and college, paying these heavy fees looks too much.It is not the affordability alone.If I recollect correctly in our time whatever was coming on our way we grabbed it and developed an aptitude for it ,be it Under graduation, be it a job.Otherwise I wouldn’t have been in flying today.But today the children want a specific line to follow right from the word go, and many a time they want to change course for various reasons, causing heavy financial burdens for the parents.

    Good to have qualifications , but at the same time one should know how to remain happy at all times.Definitely it is not the institutions that are alone responsible for this.Society and home play a huge role.When the children commit suicide particularly at premier institutions it hurts me a lot.I really pity the poor parents.Every child is a wonder.We as parents should stop comparing our children and expecting very big from them, the fancy coaching classes should disappear.More emphasis on school curriculum and availability of free coaching materials to all will make some changes to the system.Like hospitals education has become a commercial venture.

    Enjoyed reading your blog.Keep writing!!

    Warm regards

  11. You have touched a raw nerve here. Havig gone through this pain with a college going kid, I can only understand the challenges us parents have to go through.
    While all things about entitlement and lack of fire in the belly are ok, what do you do when your child had actually done well. I had the situation where my child not only performed well but got admissions in some of the top international universities only to be told by me that, ‘sorry son, can’t afford it despite your 50% fees waiver’. Was I fair on the child. The pain that I have to live with is that was i right in denying him his success.
    Someone mentioned about kids working to finance their education or atleast their pocket money or top up expenses. This is the big difference in western world and India. The irony in India is that we can’t get jobs for kids who are in school and want to work but make kids who should be in schools to work denying them the basic education.
    My kid went to an International boarding school where western kids worked over their vacations and came back with money to spend at school but I had a finance these expenses at school. Once my son asked me, can you please get me a job. I asked him what kind of a job is he looking for and he mentioned even cleaning floors in McDonalds would do. I can tell you that I tried but failed to secure a job as he was underage.
    The need is to revise the way we look at education right from school. Imparting life skills, creating dignity of labour thought and building self sufficiency in children should be part of the curriculum at schools rather than just scoring numbers and breeding unhealthy competition. A basic point is that today’s children have not been taught to respect different kinds of jobs and we are equally responsible for creating this disparity between the good jobs and bad jobs. All jobs are respectful, it is how you see them. Of we are able to create respect for jobs in our children where no job is a bad job, then we would take the first steps towards a society where children become self sufficient and not live on entitlements from their parents..

  12. Dear KP,
    It is always wonderful to read your blogs. Very imaginative with an intention to achieve worthwhile goal.
    In fact , I am the affected party of this UNIVERSITY SCHOOL FEES ABROAD.
    My both children done their MS from USA & I
    Could fund their fees without taking any loans .
    I was fortunate to get sustained income .
    Me & my wife always thought of settling our children well. Our priorities were children education & their settlement before acquiring any properties.
    The question here is ; is it worthwhile to spend so much money in sending children to USA for their higher education ?
    I say yes. If you can afford , give your child the best . You are not sending & funding your children for only comforts , it should lead to a useful conclusion in terms of good job., which can further enhance their comfortable life.
    At the end of the day , if your children are happy , you are happy .
    If children grooming is correct , there is no question of parents thinking of taking education loan and making children pay .
    Our INDIAN culture is such that the children know what parents have undergone to make them comfortable.
    I did not want to see others comments till I write my comments , otherwise I would have got biased .

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