Ankit Mehra is the CEO and Founder of GyanDhan- India’s first education financing marketplace, trying to solve the education financing problem in India. He graduated from IIT Kanpur with a Mechanical Engineering. Post his graduation, Ankit worked with CapitalOne, USA, for around 7 years. He left his job in 2013 and went on to pursue an MBA from IESE Business School – University of Navarra. At IESE, Ankit witnessed a lot of his MBA colleagues facing troubles arranging finances for their studies. The slow and opaque application process and lack of financing options that did not account for future employability prospects of the students were contrary to the risk-based pricing framework he was accustomed to building at Capital One. In order to fill in the gap, he decided to move back to India in 2015, after his MBA, to start GyanDhan with the aim to simplify access to financing for higher education and make it meritocratic and easy.
After the United States and China, India has the third-largest startup ecosystem in the world. With an annual growth rate of 12% to 15%, India has over 72,600 DPIIT-recognized startups with 103 unicorns valued at over $335.80 billion, up from 726 in FY2016-17. These startups are solving problems across 56 industries and sectors. The vast majority of unicorns are in the service sector, which accounts for more than half of the country’s gross domestic product. The job opportunities in India are increasing with more than 7 lakh jobs created by these startups, out of which, one lakh jobs were created in the IT sector alone. It is understandable for students to contemplate the worth of an expensive international degree for a better paycheck when the Indian startup ecosystem is offering equally high packages and job opportunities.
Not an easy task, the comparison boils down to factors like an individual’s starting salary, job sector, the skill set they possess, the point in their career when they decide to study abroad for higher education, and the motivation behind choosing foreign education.
Let’s look at the factors individually:
Future earnings after graduation compared to after work-experience
An individual working in the technology sector in India with an average salary package of INR 5 lakhs at entry-level would benefit more from investing in abroad education as the increase in pay would be substantial and so would be the addition to their skillset. However, a person who has spent considerable time and effort in their undergrad, or who has worked hard to acquire a specific skill set to secure a higher salary in India, would not gain as much from abroad education since their skill set and salary would not increase proportionally. GyanDhan, an
education financing platform, built an in-house Estimate Future Earnings tool to calculate the monetary returns on abroad education investments. It considers several factors – course duration, current salary package, target country, the rank of the target college, average salary hike after graduation, inflation, and expenses to give a clear picture of the return on the abroad education investment.
Let’s look at two use cases:
Case A: Person X is earning INR 5 Lakhs at an entry-level job right after graduation and decides to pursue a master’s degree from an overseas university.
Note: The graph depicts additional savings that a person would have in comparison to what they would have saved if they had not gone abroad for higher education. The tool assumes (a) that an individual has taken an education loan to cover the cost and (b) average salaries after graduation. However, there could be exceptions.
For them, an international degree from any of the aforementioned countries will yield higher salary packages and savings. “Universities abroad are much better equipped for research/hands-on experience as they are directly integrated with the IT industry to stay up to date with the upcoming technology. Most innovative technologies originate from the west, which
provides an advantage to grow faster and an opportunity to be a prominent leader or start-up founder. Work-life balance and social culture abroad also promote mental well-being and holistic development,” says Nitisha, who graduated from San Jose State University and has been working in the US for the last 6 years.
Case B: Person Y earning INR 20 lakhs with 1-4 years of work experience decides to pursue a master’s degree from an overseas university.
Note: The graph depicts additional savings that a person would have in comparison to what they would have saved if they had not gone abroad for higher education. The tool assumes (a) that an individual has taken an education loan to cover the cost and (b) average salaries after graduation. However, there could be exceptions.
For them, an international degree will not yield positive results or any increase in savings in the medium long run. Given the skillset and the salary package, an Indian startup/company would be an ideal workplace for such a person to get the optimum results. “I believe the startup ecosystem today in India is providing a high quality of work-life that students earlier could only experience by studying in the West and settling there. Not in terms of just quality of work, Indian startups are also providing very competitive compensations to the right talent, both in terms of salaries and
ESOPs,” says Utkarsh, currently working at Meesho – the first Indian social startup to enter the unicorn club.
Job sector
Both the job sector and the demand in that field are equally significant. For instance, the job market in India is ripe for a software developer with a bachelor’s degree but no work experience. With the proper skill set, a talented developer stands to earn an average of INR 15 lakhs to INR 25 lakhs in India. There will be equally lucrative job opportunities in India and after a master’s degree from any reputed university abroad. However, the same cannot be said for a core engineer or an ethical hacker. These professionals will profit more from an international degree and a job in the US, for instance, since the field is not as developed in India.
The motivation behind overseas education
A high paycheck and a steep career graph, sometimes, is not the only factor students consider when deciding to study abroad. New-age generation gives equal importance to international exposure, multicultural values, improved standard of living, and the self-dependence that comes with living away from home. If the motivation behind studying abroad is the allure of living and working there, then the booming Indian startup ecosystem is no match.
Before deciding between education abroad or a job in an Indian startup, students should factor in the above-mentioned points. The startup boom may not be as lucrative as that international degree in the long run. A case-to-case analysis is necessary to choose the optimum career option.