'Don't give bankers that opportunity': Capitalmind CEO warns against high-cost education loan trap 

Capitalmind CEO Deepak Shenoy on Monday cautioned Indian families weighing foreign education against massive loans, calling systematic investing a safer path than debt-laden degree funding. 

"Saving for your kids' education is primarily to ensure you don't saddle them with debt when they start their careers," Shenoy posted on X. "A foreign education should assume that the child comes back to India after and will have to work in India."

He added: "This is also going to cure the misunderstanding that going abroad for studies automatically allows you to migrate there... it was easy earlier perhaps but it won't last. In India there is no personal bankruptcy law, so a banker will be able to recover the loan from you, forever. Don't give them that opportunity. The SIP is always going to be better than an EMI."

Shenoy's remarks came in response to Zoho founder Sridhar Vembu's post about a recent student loan case that raised alarm. "A recent distress call: a student has taken about ₹70L ($80K) debt at 12% to get a master's degree in a small college in the US," Vembu wrote. "The problem: the job scene in IT is bad, especially so for foreign students and payments on the loan are starting soon."

Explaining Zoho's limited hiring position, Vembu added: "I don't know what we could do in this situation because we have not been hiring much as we transform ourselves for the AI era. That caution in hiring is also because we have a policy of not resorting to lay-offs."

He continued: "I urge students and parents to be cautious in borrowing heavily to pursue degrees abroad. Borrowing heavily to pursue degrees in India is unwise too. I strongly believe we should not trap young people in debt in the name of education. The only smart course is for prospective employers to fund training programs and for the industry to broadly accept such alternative credentials rather than ask for formal degrees."

"The best investment we make as a company is in training and skill development. I hope companies do this widely so we don't strand young people in debt," Vembu said. 

Investor Santhanam Vaidya also supported the cautionary stance: "Absolutely. No point in blindly going in for huge education loans in search of fancy degrees. The student and the parents should be aware that job markets don't remain the same! There are numerous job oriented and currently in demand skill/education courses of short duration offered by IIT-M. They are on line / offline mode. They don't cost a bomb."