How Democratizing Access To Quality Education Is Crucial For Reviving The Economy
The emergence of edtech combined with a change in the mindset towards spending on upskilling and reskilling has positively impacted the nation's march towards a robust digitized economy.
COVID 19 has impacted all walks of life and as a nation, we are facing the lowest growth rate since the economic liberalization in the 1990s. During the lockdown, an estimated 14 crore people have lost jobs, more than 45 percent of households in the country reported an income loss as compared to the previous year, and about 53 percent of the businesses in the country are reported to have been significantly affected by the slowdown.
The education sector too has been impacted in a big way due to the pandemic. The nation-wide lockdown had closed each academic institution, as a consequence of which, learners going from school-going kids to post-graduate college students, were affected. UNESCO estimates that around 32 crore college students were impacted due to the shut-down of the regular classes. Though the country tried to move education online through digitization, only 12 percent of students who were affected could bridge the gap to access online education using smartphones, laptops, and internet connectivity.
The government has announced a slew of measures to revive the economy which included a moratorium on educational loan repayments by the Reserve Bank of India as many have lost their jobs or part of their income during the pandemic. The disbursement rates of loans in the sector have also been impacted as the first quarter witnessed only 20 percent of loans as compared to the same quarter last year.
The educational finance segment has a large role to play in imparting growth and development of the country over the past few decades as it has positively influenced the decisions of the youth to pursue the education of their choice irrespective of the expenses involved. Over the last few decades, the parents have been resorting more and more towards availing loans to finance the education of their children, and the change in mindset towards `Study Now and Pay Later' has contributed toward the nation's growth and increased the pace of digitization.
Though the economy is now limping back to normalcy faster than was expected, the impact on disbursal of loans in the educational sector will have a continued impact on the growth of the country. However, there are many factors that indicate significant growth in the segment.
Though education has become mandatory for children and youth in the country, ancillary spend on the same has increased; it has opened up new vistas for the same. Unlike earlier, while parents were satisfied with the facilities available in the public sector for educating their wards, their 21st-century counterparts have started pursuing education in the private sector right from schooling. The opening up of new vistas has created new-found demands and as a result, the education sector has witnessed the emergence of both edtech and fintech companies in the segment owing to the increasing demand for upskilling and reskilling from students and employees.
While upskilling courses are availed by employees with 3-5 years of experience in the industry, reskilling courses are applied for by youth in the age bracket of 19-23.
The fintech companies operating in the education sector have been instrumental in creating a level-playing field by providing loans without collateral, and have truly empowered the youth especially in the Tier II and III cities where the loan disbursal process included complex procedures deterring aspirants from availing the same.
The emergence of fintech companies in the education sector will augment the spread of digitization in the country by promoting more and more people to embrace high-quality education. The coming together of edtech and fintech presents a great opportunity for the nation to upskill, improve the quality of life, and thereby boost the economy.