It can be stressful to plan for a college education, especially when you’re brainstorming on matters like selecting the right college and securing the funds for the same. It is hard to figure out what percent of parents pay for their children’s education, but an Assoccham survey suggests that 65% of parents spend half their take-home pay for their children’s education which places a significant burden on the family budget. The survey shows that the rising cost of education has become a major cause of worry for parents. If you grew up in a family with limited income or one with a lot of siblings, it would be hard for your parents to arrange the funds for your college education. Given you don’t want to put the burden to your parents, being financially responsible for your college education and thereby taking up a student loan is the best alternative.
Paying back the education loan can be a hassle, which most likely, you wouldn't want to drop on your parents’ shoulders for obvious reasons. Here are five steps to help you pay for your college education on your own -
Apply for an education loan
Taking an education loan is surely one of the best ways to ensure funds for your college when you don't have much financial support coming from your family. Apart from tuition fees, there are various other expenses that also come under the cost of study like hostel expenses, library exam, lab fees, travel expenses, cost of uniform, books etc. Therefore, an education loan can help you cover not only the cost of the course but almost the entire expense of education.
Look for scholarships/savings to add to your college funds
Scholarships are the best form of financial aid since you don’t have to pay it back. If you have a good academic record, it will be easier for you to avail a scholarship. You can search for the best scholarship program on our scholarship portal. Moreover, you can also invest your savings into your college funds so as to minimize the overall amount you have to take a loan for.
Get a part-time job/internship
Taking an education loan is a very important financial decision as you have to repay the loan on your own. In most cases, you will be required to repay the loan during the study period in the form of EMIs. So working part-time can help you get through with the EMIs. You can also apply for a Teacher Assistantship role at your college which would be a decent source of income. A summer internship can also help you earn a good amount of money that you can channel into your monthly repayments.
Look for tax exemption
Taking an education loan also makes you eligible for tax benefits. You can profit tax reductions on the interest paid on your educational loan under Sec 80E of the Income Tax Act. This benefit can be accessed over and above the Rs. 150,000 deduction permitted under Section 80E. You can avail the tax deduction once you start paying the interest on the education loan. Remember to check with your lender to see if their loan program qualifies for tax benefits.
Minimize your college costs
A piece of golden advice would be to minimize your college costs as much as you can. If you follow a strict regime of avoiding recreational activities (eating in a fancy restaurant, watching movies every Friday, etc.,) as much as you can, it would be much easier for you to save some money which you can later use to pay back your EMIs.
Learning to take control of your college education on your own hands can set you up for a better financial future.
Relieve your parents from the recurring financial burden, take matters into your hands and turn your educational aspirations into reality. Taking an education loan will be one of the best decisions in your pursuit of a college education because learning how to repay the loan on your own will help you develop some essential financial habits and instil a sense of financial responsibility in you. Moreover, such financial habits will really help you shape your success once you’re in the real world.
1. Fill up an online application form.