A Peek into the Evolution of Education Financing

Posted on January 7, 2022 By - NoPaperForms 3 Min Read
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Over the last 9 months, we processed close to ₹900 crore worth of fees for our partner institutions. This mainly comprised Token Fees - a part of the 1st semester fees paid by students/parents to book their seat once they have received their confirmation letter. We were amazed to see the scale of the digital transactions and the speed at which the institutions and students adopted the same.

However, what we observed with some distress was that transactions close to ₹200 crores were not completed; that a large number of deserving students had to let go of their offer letters. When we dug deep, we discovered that most of them did so as they were not able to manage that money in the given timeframe which is typically 1-5 days in most cases. With the increasing cost of education, this is becoming more challenging for parents in India.

Why Education Remains Out of Bounds for a Large Population of Students

While parents would go to great lengths to finance their child’s education – from mortgaging their house, pawning jewellery, and selling assets to borrowing from informal money lenders at high interest rates, there are still many students who have to completely give up on their dreams of higher education.

Today, out of an estimated $110 billion education market, education financing covers 5 %; it is majorly offline-heavy, driven through banks, and very rigid. While banks have offered education loans traditionally, since 2018, theyve steadily cut down on education lending, due to rising defaults, as per Reserve Bank of India.

The problem is inadequate financing, at the right time to the right aspirant.

Due to the increasing cost of education and limited or no access to formal loans, higher education remains out of bounds for a large section of the Indian population. If you are applying to a Tier-2 category institute with no collaterals and low or no credit score, you can be assured that you have to leave your offer.

As a net result, on one side the Institution loses out on qualified, meritorious students and on the other, the students lose out on good opportunities.

How Collexo will Revolutionize Education Financing in India

With our deep understanding gained by working with close to ~600 Higher Education Institutions and 400 Schools, we are delighted to announce the launch of Collexo – an integrated payment and financing platform for the education sector. Through Collexo, we will be empowering our Partner Institutions to get their “Full Fees, Upfront” while parents will be able to pay the fees in easy 8 to 12-month Installments with no interest or extra charges and collateral-free access to loans. As of now, we are selectively opening this for 10 partners but we will ramp it up soon and open it up for all our existing partners.

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Here are some key highlights on how Collexo will benefit institutions, parents, and students

  • 100% upfront cash liquidity for institutions while parents pay monthly with no interest or extra charges. This will empower institutions to accelerate their growth roadmap and unburden the parents and students of paying a lump sum amount at once.
  • Hassle-free fee collection for institutions and seamless, flexible payment options for parents. The institutions will be able to track all their payments and the parents will earn handsome cashback and rewards.
  • Increased quality admissions and reduced dropouts as we make education affordable for all
  • Opportunity to launch premium courses as parents will be able to afford to pay more monthly

Through Collexo, we will make education affordable for all!

Education remains the sure shot way to empowerment for millions. We will give our all to ensure that every student gets a fair shot at attaining it.

Collexo will universalize easy payment to make education affordable and thus, opportunities accessible.