The IIT Hike: A burden of debt

High fee, low returns and loan burden can potentially kill the purpose and lure of IITs

The IIT Hike: A burden of debt
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Part I of The IIT Hike debunks myths about IIT salaries. Click here.

Nearly 10,000 students are admitted into IITs every year. This means that 40,000 students of four-year courses are studying in the institutes at any given time. Assuming that 50% students take up five-year courses, the total number of students in all IITs in a given academic year is 45,000. These are the students who are considered our finest minds. Hopes are pinned upon them to achieve great things, for themselves and the national economy.  Describing students of post-graduate programmes as strategic assets to the country, the Dr Kakodkar Committee actually suggested waiving the entire tuition fee at IITs. The decision to opt for a hike instead goes entirely against this logic and instead sees students as a good investment. Though it has been reported that the tuition fee for SC/STs would be waived, we would like to bring to the notice of readers that tuition fee was always waived for SC/ST students at IITs. The claim can be verified here: IIT Patna, IIT Kanpur, IIT Kharagpur, IIT Roorkee.

So what happens if the fees are hiked for those who are not eligible for waivers? What happens when students are seen, not as strategic assets, but as a group from which a government hopes to earn in the short term?

Crippled by loans

It was earlier noted that the median salary of fresh IIT graduates is around Rs 8-9 lakh per annum. However, engineering jobs, especially those outside computer science, earn lower since these professionals are paid lower than those in finance and other high-profile sectors. The fresh-out-of-IIT salaries that make headlines are not representative and knowing that one is likely to earn much less in reality would discourage many students from pursuing a career in engineering. This would be a terrible loss.

Lowering the bar  

With the IIT degree costing more, students who plan to pursue PhD and higher studies after graduating from these institutes — including those admitted into pure science courses at the undergraduate level through joint entrance examinations — would be discouraged by the financial implications of this decision.

The loan burden would mean that either postgraduate plans have to be delayed by considerably longer (by which time the prospects of PhD diminish) or such plans have to be dropped entirely.

Sit-down effect

The third effect would be on the students who plan to follow the start-up route. There is evidence from other countries to suggest that there is a strong negative correlation between student debts and new businesses. To discourage entrepreneurship is to actually go against one of this government’s priorities, but that is most likely to be the result of the proposed fee structure. With the raised fees, we are potentially hampering the prospect of many innovative ideas coming to light and nipping the evolving entrepreneurial culture in the bud.

Anti social

Although these students are not usually conversation topics, there are those who come out of IIT with plans to pursue social sector jobs, despite the low salaries. There is documented evidence that student debt at early stages of career can reduce the probability of students choosing a low-paid “public interest” job or career. To lose this set, which privileges social work over salary, would be an enormous loss to the country.

Regardless of student’s future plans, the new fees are likely to cause huge financial pressures on the families, especially those with more than one child. They already struggle hard to invest in education before sending a child to IIT due to failure of public systems. Students with high potential end up committing their productive years paying off debts and restricting their options because of the financial burden upon them.

Does it add up?

Hypothetically, if the IITs are seen as high fee-low returns ventures for students, the thought of the loan burden could kill even the aspiration to study in IITs for many — an unquantifiable yet deleterious offshoot of the impending fee hike.

All the facts and issues raised have significant negative effects on the economy. Ironically, this fee hike comes from the government that promised to increase spending on education equivalent to six per cent of GDP in its manifesto.

Is the additional revenue generated worth all this cost? One must note that if the hike goes through, the additional revenue generated would be worth a mere Rs 250 crore[i], which would be 0.009 per cent of the higher education budget (Rs 27,000 crore). This is a miniscule amount on the scale of budgetary expenditures.

Even if one is inclined to see students as cash cows — a ruinous idea, as this article has shown —the fact is that the proposed hike in IIT fees is that it is unlikely to achieve its intended objective of earning significant amounts of money. Neither will it encourage prospective students to pursue postgraduate degrees.

Which begs one simple question: Why?

[i] Accounting for waivers given to SC/ST, physically handicapped and students from economically weaker backgrounds, even if the remaining 50 per cent students pay full fee, the higher bound of additional revenue is Rs 247.5 crore [22,500*(2,00,000-90,000)].

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