US Exim Bank ready to extend education loans to Indian students

The US Exim Bank is willing to give education loans to Indian students who want to study in the US, the Chairman and President of the Bank, Mr Fred Hochberg, said today.

Answering a question raised by Dr Sankaran Raghunathan, Dean, The National Management School, in an interactive session organised here by the Indo-American Chamber of Commerce, Mr Hochberg said that the US Exim Bank has been “actively exploring this”. However, he noted that the bank would need to “work with an entity” as it could not give loans to individual students.

Mr Hochberg also immediately assigned an official of the US Exim Bank to pursue the matter with Dr Raghunathan.

Later, in a chat with Business Line, Dr Raghunathan said that there are some 105,000 Indian students in the US, the second highest number after China. He estimates the total annual spending of all the students at $2 billion. A fourth of the students are doing undergraduate programmes, where usually, they have to pay out of their pockets. Availability of Exim loans will help raise the number of undergraduate students from India. Students who borrow from Indian banks pay at least 12 per cent as interest and also have to offer collateral. “If we are able to get the Exim Bank to provide the loans, the interest rate will be as low as 4.5 per cent and not higher than 6 per cent with a longer repayment period,” says Dr Raghunathan. This in turn will enable more people to go to the US for education (instead of other countries) and there will be a beneficial impact on the US economy, he says.

INDIA, A FOCUS COUNTRY

Mr Hochberg said that India was a big market for the US Exim Bank, whose mandate is to support exports out of the US with an objective of creating jobs in the US.

He said that the bank's exposure to India is second only to Mexico (“a country with which we share a 2,000-km border”). But if the current trend of lending continues, India could overtake Mexico in terms of the bank's exposure, he said. The bank has given loans worth $7 billion to India, compared with $8.5 billion to Mexico. “I have not visited any country more than India (as the head of the US Exim Bank),” Mr Hochberg said.

Source:  Business Line

Strict UK visa rules to affect Indian students

However, deserving candidates need not fear losing out on quality education in renowned institutes.

If the UK government's review of its visa norms was not enough to send Indian students looking at other destinations, the shutting down of institutes may bring the numbers further down. Besides, the US is getting more serious about attracting international students.

Till 2010, student visa allocation for the UK declined by six per cent. In April, UK did away with the Tier I Post Study Work (PSW) visa. The UK Border Agency confirmed that changes in the student visa rules will result in fewer visa applications. “The UK government is committedto minimising abuse of the student immigration system, while ensuring support for the brightest and best students to continue to study at UK’s highest quality education institutions. Closure of the PSW was triggered by an increase in abuse in the private education sector in the UK. It was found that there was increasing abuse in the private further education sector (by some, but not all colleges), so the reforms were targeted at those institutions where change was considered to be most necessary,” said Sam Murray, regional communications manager, UK Border Agency, South Asia.

Since May 2010, the UK Border Agency has revoked the licenses of 97 Tier 4 UK education providers. A further 36 currently have their licenses suspended, said a UK Border Agency Spokesperson in India.

“The recent shut down of Training and Advanced Studies in Management and Communications (TASMAC)'s London campus last week is due to tighter visa restrictions implemented by the United Kingdom Border Agency (UKBA),” said Sameer Dua, joint managing director, TASMAC group.

On March 22, 2011, the UK Home Secretary, Theresa May, announced sweeping changes to Tier 4 student route for migration. She said from April 2012 all institutions wanting to sponsor foreign students would have to be classfied as a Highly Trusted Sponsor by the UK Border Agency and would need to be inspected by an approved educational oversight body.

The UK government wants the brightest and best international students to come to the UK to study in its high quality education institutions. These changes to accreditation and inspection requirements protect legitimate students and ensure that only those education providers with a proven track record in immigration compliance will be licensed to bring international students to the UK.

“In the event that a student is already in the UK and his or her sponsor surrenders its license or has its licence withdrawn, the student will usually have 60 days to find an alternative education provider in the UK. If the student has less than six months left his or her leave will not be reduced,” the spokesperson added.

UK Border Agency in an email said it was important for international students to receive the standard of education that they deserve and have paid for. This is why the UK government, in its first stage of reforms to the student visa system, has increased accreditation requirements for sponsors and extended robust inspection arrangements to private sector providers.

“The tightening of visa requirements by Australia and the UK is making them less attractive destinations for students as they see lower prospects for future jobs and immigration. Also, budget cuts in the US public institutions are prompting them to recruit international students more actively as an additional source of revenue,” said Rahul Choudaha, director of development and innovation at World Education Services in New York.

International student enrollment in higher education in Australia and the UK grew by 81 per cent and 47 per cent respectively between 2002 and 2009, as compared to 18 per cent in the US. In absolute terms, Australia, the UK and US each added nearly 100,000 students over the same period.

“This translates into comparatively slow growth for the US, given that the size of the American higher education system is 17 times that of Australia and eight times that of the UK,” explains Choudaha.

According to Choudaha, some of the early reports for autumn 2011 show a significant increase in international student enrollment at US universities. For example, at the University of Iowa first-time freshmen international student enrolment reached record levels of 484 this year, compared to 388 last year. Likewise, at Arkansas State University international student enrollment for autumn 2011 passed 1,000 students for the first time. Last year 780 international students enrolled.

According to the Organization for Economic Cooperation and Development (OECD) number of internationally mobile students grew by 1.6 million between 2000 and 2009. Choudaha says this trend will continue to be driven by the increasing ability of prospective students in countries like China and India to afford foreign higher education.

Sibal pitches for American varsities to open shop in India

As the first ever high-level Indo-US education summit gets underway, India on Wednesday pitched for famed American universities to "reach out" to the country, with the visiting minister Kapil Sibal saying that tie-ups would yield high economic returns. Making a strong case for US institutions of higher education to partner with those in India, the minister for human resource development said it is time that the US institutes of higher learning realise that the "way to move forward in education is to come to India, to collaborate and set up institutions and reach out to people."

He, however, added that India too has to "reach out" and create an environment for US universities to set up base in the country.

"You have a higher education structure which is the envy of the world, it has been at the front of all knowledge creation. US has the best academics all over the world. It is time for you to reach out, collaborate with us because in that process you will participate in not just helping us solve our problems but helping us solve the problems of the world," he said at an event on India-US education opportunities organised by the Centre for Strategic and International Studies here.

The day long education summit on October 13, to be co-chaired by Sibal and Secretary of State Hillary Clinton, will see participation by over 300 higher education leaders, government and private sector representatives.

Sibal pointed out that investing in the Indian education sector makes good economic sense for the US as the return on investment in India is much higher as compared to any other country.

"Your model that kids should fly across the Atlantic to go to Harvard, Stanford or Yale is not a good economic model because your investment per dollar gives you a very small return. The same investment in India in collaboration with an Indian institution will give you much higher return," Sibal said.

While only 100,000 Indian students are currently studying in the US, Sibal said India has over 200 million students who need quality education.

"So instead of having 200,000 people come to the US, you can actually with the same money empower a million kids in India. There is need to change the mindset of people in the education sector."

To address the education needs of the young in India, the country would need another 1000 universities and 55,000 colleges in the next 10 years when the number of children going to college increases from the current 16 million to 45 million.

"India cannot build 1000 universities on its own. So we will perforce have to create an environment in which private sector investment, FDI and public-private partnership will be channelled into the education sector."

The mindset of the Americans that students should come to the US to study is the "wrong way of going about it" because the global economy and solutions are not going in that direction.

Capital flow will not be directed to developed economies, which have reached saturation point, Sibal said, adding that capital will flow to countries with opportunities.

"There are opportunities galore in India in every part of its economy, be it infrastructure or education" and billions of dollars of investment is projected to be made in these sectors.

Source: The Hindustan Times