The (mad) Education Rush..
Ten years ago, the cost of an engineering course was Rs.5-20k p.a - today it costs Rs.1-3L p.a. A medical degree that costed Rs.10-25k p.a a decade ago now costs Rs.2.5-3L p.a, while a business degree that costed Rs.10-50k is now costing Rs.5-15L p.a. Put in financial perspective, over the last decade, "education inflation" in engineering is 30% p.a, 40% p.a in medicine and 50% p.a in business courses - way way higher that our CPI inflation which is at sub-10% p.a. The scenario overseas is equally bad - if you consider US, the education inflation over the last decade has been 5% p.a - what costed $150k ten years ago is now $240k. However the dollar-rupee conversion rate further deteriorates it, so a 2-year course that costed Rs.80L a decade ago in US (including living expenses) would now cost Rs.1.5 crores.
What do the numbers say?
Per AICTE (All India Council for Technical Education) India produces 15Lac engineers p.a thru its 3300+ engineering colleges - more than a third of these colleges are now shutting down due to poor student intake. Of these 15Lac engineering graduates only 10% is employable, the rest do not possess adequate technical knowledge and hence do not qualify for engineering jobs. Similarly the 2500 polytechnics across the nation produce 8.5Lac skilled technicians p.a but <20% find placements.
The boom & bust of the education biz!
Due to the economic boom from 2003 to 2012, many people with land, capital and political connections entered the education business and opened colleges that offered an array of courses by lowering the minimum qualifying marks from 60% down to 40% and by hiking up the fees to make quick profits. The theme held well in the boom years as several middle and upper middle class parents saw engineering degree as a door to prospective careers (especially in IT sector) for their children and poured their life savings into it. Now that the economy has slowed down, the industry is very choosy about hiring - the trend has reversed and several lakh seats are vacant at these newly sprung and poor quality engineering colleges. Same is the case with business, medical & dental schools.
Destructive & deeper social impact?
It is unfortunate to see how the mad professional courses rush has led a generation of young minds to pursue careers they are disinterested with and as a consequence produce poor quality output which is damaging at the individual as well as micro & macro levels of the economy (imagine a doctor unable to differentiate between gastric issues & heart attack!!). After having spent several lakhs on their courses, many of them end up in BPOs, retail jobs and even as drivers, while some are still being fed by their parents. At the same time, those who joined basic degree programs such as B.Com, B.Sc have moved onto better job and career prospects in the banking and pharma/healthcare sector which pays at par with the IT sector. Now there seems to be a fad that B.Com will lead to high paying bank jobs - most parents forget that after 5 years this wave may tide over as well.
What holds for the future?
It is important to let our children focus on their core skills and to enroll them in courses that they are interested in rather than chasing courses with "perceivably high pay prospects". People who followed their interests by pursuing the much disdained courses such as economics and creative arts are all well placed in the financial, retail & other organized sectors today than those who chased the high paying engineering/medicine or business degrees. While you recognize that education is an important investment, it does not necessarily mean that an expensive education automatically guarantees higher pay and better career prospects. You need to make a choice whether to get sucked into this mad education rush and make education businesses richer (or) to invest prudently in your young ones strengths!
What do the numbers say?
Per AICTE (All India Council for Technical Education) India produces 15Lac engineers p.a thru its 3300+ engineering colleges - more than a third of these colleges are now shutting down due to poor student intake. Of these 15Lac engineering graduates only 10% is employable, the rest do not possess adequate technical knowledge and hence do not qualify for engineering jobs. Similarly the 2500 polytechnics across the nation produce 8.5Lac skilled technicians p.a but <20% find placements.
The boom & bust of the education biz!
Due to the economic boom from 2003 to 2012, many people with land, capital and political connections entered the education business and opened colleges that offered an array of courses by lowering the minimum qualifying marks from 60% down to 40% and by hiking up the fees to make quick profits. The theme held well in the boom years as several middle and upper middle class parents saw engineering degree as a door to prospective careers (especially in IT sector) for their children and poured their life savings into it. Now that the economy has slowed down, the industry is very choosy about hiring - the trend has reversed and several lakh seats are vacant at these newly sprung and poor quality engineering colleges. Same is the case with business, medical & dental schools.
Destructive & deeper social impact?
It is unfortunate to see how the mad professional courses rush has led a generation of young minds to pursue careers they are disinterested with and as a consequence produce poor quality output which is damaging at the individual as well as micro & macro levels of the economy (imagine a doctor unable to differentiate between gastric issues & heart attack!!). After having spent several lakhs on their courses, many of them end up in BPOs, retail jobs and even as drivers, while some are still being fed by their parents. At the same time, those who joined basic degree programs such as B.Com, B.Sc have moved onto better job and career prospects in the banking and pharma/healthcare sector which pays at par with the IT sector. Now there seems to be a fad that B.Com will lead to high paying bank jobs - most parents forget that after 5 years this wave may tide over as well.
What holds for the future?
It is important to let our children focus on their core skills and to enroll them in courses that they are interested in rather than chasing courses with "perceivably high pay prospects". People who followed their interests by pursuing the much disdained courses such as economics and creative arts are all well placed in the financial, retail & other organized sectors today than those who chased the high paying engineering/medicine or business degrees. While you recognize that education is an important investment, it does not necessarily mean that an expensive education automatically guarantees higher pay and better career prospects. You need to make a choice whether to get sucked into this mad education rush and make education businesses richer (or) to invest prudently in your young ones strengths!
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