Manoj Gupta, 30, a finance manager at a leading multinational bank took up his first job four years ago after completing his post graduation from Indian Institute of Management, (IIM) Indore. “I wanted to be an entrepreneur but decided against it since I had to repay my education loan,” said Gupta.
“Before I got the job, my father, a bank official, had used all his salary towards paying my fees, which was very stressful for our family,” said Gupta, who now earns about Rs 2 lakh per month.
Similarly, Kavita Iyer, 51, a senior official at a multinational IT firm, who wanted to quit her job because of health issues, could not do so due to an education loan payment for her son who studied management at the Indian School of Business Hyderabad.
Gupta and Iyer are not alone.
Many students and parents are struggling to pay the steep education fees of management institutes and hence have to resort to loans.
Since 2010, fees at IIMs have gone up by over 30%. At IIM Bangalore, for example, the fees for the 2010-12 batch was Rs 13 lakh, which has now gone up to Rs 17 lakh. At the Gurgaon-based Management Development Institute, the average percentage increase in fees in the last 3 years has been over 7%. Others including XLRI, International Management Institute (IMI), SP Jain Institute of Management & Research, XIM-Bhubaneswar and IIM-Ranchi have also approved fee hikes this year.
While three years ago, number of educational loan accounts stood at 22,37,031 (2010-11), it rose to 25,09,465 in 2012-13 and 25,70,254 up to December 31, 2013-14.
“I decided to call off my admission at IIM, which was my dream, due to the fees burden of over Rs 16 lakh. However, I decided to do my management studies from IIT- Delhi, which was much cheaper, Rs 4 lakh,” said Nitin Bajaj, management student at IIT Delhi.
Institutes, however, said that fee hikes are essential to factor in fiscal inflation. “For a programme that draws its faculty from the best around the world, we strive hard to keep our fees affordable” said a spokesperson at ISB, which charges $40,000 (Rs 24,00,000) for a post-graduate programme in management.
Management colleges are designing policies and scholarship programmes for students instead of lowering the basic fees structure. “IIM, Banaglore, extends financial aid in the form of part or full tuition waivers to students in need of financial assistance,” said Devanath Tirupati, director in-charge, IIMB.