Studying abroad opens doors to diverse cultures, academic excellence, and personal growth, yet financing often poses a daunting challenge. Enter "Study Abroad Now, Pay Later" schemes, revolutionizing how students pursue international education. This article explores the nuances of tailored student loans, unraveling their benefits and global impact.
No Immediate Cash Out
With no immediate financial burden, students can focus solely on their academic endeavors. According to the Institute of International Education (IIE), 65% of students cite financial constraints as the primary obstacle to studying abroad. This flexibility not only enhances liquidity but also empowers students to immerse themselves fully in their studies.
Tax Benefits
Education loans often qualify for deductions or credits. For instance, under the Liberalised Remittance Scheme (LRS), foreign remittances up to Rs 7 lakh for education incur no Tax Collected at Source (TCS). Additionally, interest paid on education loans is deductible under Section 80E of the Income Tax Act, 1961. These tax benefits make studying abroad more affordable, lightening the financial load on students and their families.
Minimum to No Collateral Is Required
Conventional loans typically demand significant collateral, posing obstacles for economically disadvantaged students. In contrast, study-now-pay-later schemes often require minimal or no collateral. This accessibility is crucial, as over 50% of students from low-income households face financial barriers to higher education, as per OECD data. By eliminating collateral requirements, these loans ensure financial constraints don't hinder access to quality education.
Benefits for Female Applicants
Recognizing the correlation between female education and economic growth, study now pay later scheme offers reduced interest rates, extended repayment periods, or dedicated scholarships for women. UNESCO research indicates that a 10% increase in female education correlates with a 3% rise in a country's GDP, underscoring the significance of such provisions.
Repayment Deferred Until After Course Completion
Unlike traditional loans demanding immediate repayment post-graduation, study-now-pay-later schemes offer deferred repayment options. This grace period, often extending up to two years post-course completion, allows students to establish themselves professionally before shouldering loan repayment responsibilities. A study by the Australian Government Department of Education suggests that deferring repayment until securing employment reduces default rates, empowering students to manage their finances more effectively.
In conclusion, study-now-pay-later schemes herald a new era in education financing, making studying abroad feasible for students worldwide. By mitigating upfront costs, offering tax benefits, and providing flexible repayment options, these schemes empower students to pursue their academic aspirations unhindered. Moreover, by addressing gender disparities and promoting inclusivity, they foster global citizenship and facilitate the exchange of knowledge across borders.
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