How this start up is helping students pursue their overseas education goals

By Ravi Samalad |  29-06-21 | 
 
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About the Author
Ravi Samalad is Assistant Manager - Editoral for Morningstar.in.

Edufund is an online start-up investment advisory firm founded by Eela Dubey and Arindam Sengupta that aims to bridge the gap between the aspirations of Indian students to pursue overseas education and their financial preparedness. We caught up with Eela Dubey to understand how they are helping parents fund their children's education. 

Tell us about what inspired you to start a business in India? Why did you choose to focus on education as a niche?

I think many founders choose to work in areas where they’ve directly or indirectly felt a pain point. And while I am no different, I experienced the pain points of education both in my professional and personal life.

Having grown up in a middle-class family in upstate New York, I was by no means poor. But it also meant my parents could not afford to pay over $200K for tuition straight from their pockets. Instead, I financed my higher education in a fragmented way by taking out loans and working two jobs.

I was also incredibly lucky to receive a scholarship, and my parents were gracious to help me as much as they could. In other words, though it was difficult I managed to make it work.

During my university years, I became involved in sustainable development policy within the UN ecosystem. I wanted to understand how multilaterals, governments, and other stakeholders were solving some of the world’s most pressing development issues.

However, I wanted more; I wanted to be on the ground working with local communities and see change in real-time. That’s when I decided to spend some time in India working with two non-profit organizations in the education sector. Rather than working in policy or management, I actually worked with students in classrooms in a teaching capacity. Many of these students were from low income communities who I suspected would not be able to even dream of higher education because of costs.

It may sound cliché but that experience was a huge turning point for me in my mindset. It made me realize that in a country like India education can provide mobility for so many people, but that finances can be a huge deterrent.

Though I walked out of undergrad with sizable loans (which I ultimately paid off), I would not change anything about my education. My time in university gave me both hard and soft skills, an incredible network, and challenges that have shaped my personality.

Education is not just about imbibing bookish knowledge, but also the interpersonal learnings we gain through people and an environment. And that’s what I want for so many other students out there—to enjoy this learning experience of a lifetime and not let fees be a barrier to entry.

Unfortunately, the cost of education is increasing at exorbitant rates both in India and abroad. That’s why our main goal at EduFund is to push parents to invest an amount each month so that in the future, their children have to worry less. Even a small amount can go a long way in the future.

Which are some of the most popular countries and universities where Indian students aspire to study?

Historically, some of the most popular countries Indian students choose to study include Canada, the United States, the U.K., Australia, and New Zealand. Other countries such as France, Denmark, Germany, and Singapore have been increasing in their popularity as well.

Although 2020 was an outlier year because of COVID, it is estimated that around 7 lakh students have been going abroad to study each year since 2018. This number has seen a steady increase from 2000, when only 66,736 Indian students decided to pursue an international education.

Due to higher penetration of the internet and social media, many online education platforms have come up recently. How do you see this space evolving?

It’s hard to predict the exact direction that online education platforms will take. What is clear is that e-learning has democratized access to education in many ways. Around 15 years ago, the likes of Khan academy were a revolutionary concept for online learning. In 2021, there are a wide variety of online coding classes which 5-year-olds are participating in.

If anything, these platforms have revolutionized the accessibility of learning. That being said, students should be aware of what e-resources they’re using to avoid misinformation.

As for higher education at the university level, we do not foresee on-campus learning becoming irrelevant. It is possible that more hybrid styles of learning might become popular. However, it is difficult to replace the knowledge exchange that happens when a student is in the same room as a professor and their peers.

Humans are and have been communal beings throughout history. We thrive on “togetherness,” and being able to exchange information in person. Because of these factors, it's very hard to envision a world where learning becomes completely remote and online.

What kind of products and services does your platform offer?

To put it simply, the EduFund app allows parents to start investments in mutual funds, US equities, gold, and FDs. The idea is to help parents build a “nest egg” for their children’s higher education, and be disciplined about making investments each month.

Most parents and students are genuinely unaware of the huge costs of education both within India and abroad. Through EduFund, they can see the exact costs of their children’s education in the future and how to go about planning for it.

If parents are unable to save for the complete amount or are late in the investing game, we also offer education loans to students at competitive interest rates. The idea is to help parents and students balance this financing journey wisely without it being a barrier to achieve their dreams.

We also connect students to education counsellors and mentors in the space. If a student is confused about what country to study in or how to prepare for the IELTS, they can get in touch with one of our consultants to guide them. Or if they do not want to speak to a professional, EduFund tries to connect them with actual students that are studying in a specific country or stream of their interest.

What are the fees charged by your platform? What differentiates your platform from other online advisory/robo investment platforms?

Unlike other online investment advisors, EduFund focuses on one goal and one goal only - higher education. Our entire investment platform is built around educating parents and students on the future costs, and how to budget for those costs.

Many other robos club education as one part of many goals in a larger portfolio. While doing this, however, many are not accounting for rising costs in education and other ancillary costs such as living expenses. In many countries, the cost of education has risen 4% a year over 20 years. Education inflation is not a joke, and therefore we cannot budget for the costs to remain the same as one’s child gets older.

At EduFund, we help parents construct their portfolios keeping this factor in mind so that they can be realistic in trying to achieve their goals. We also understand that in some cases parents and students may not be able to save and invest for the entire amount of tuition.

In our view, costs should not be a barrier to entry for students. Therefore, we try to match that entire amount but also help students avail education loans at competitive and affordable interest rates, with low margin.

Who are your target audience in India?

Our aim is to work with both parents and students. Before building EduFund, we surveyed over 500 parents in tier 2 and tier 3 cities in India. We quickly realized that there is a huge gap in these geographies. Parents in these areas wanted to plan, and invest for their children but were unaware of exactly how to do so.

Additionally, they needed a bit more hand-holding in the process because there is a massive trust deficit. Taking from these learnings, our hope is to specifically target parents in tier 2 and 3 cities where we feel, through knowledge sharing, we can empower them to invest and think about the long term future of their children.

Similarly, we realized that students in tier 1 cities typically have more access to resources that will help them prepare for their higher education, such as counselling, exam preparation and mentorship. And while there is still so much scope for EduFund to work with students in these cities (simply because of the sheer size of India’s population) we observed that students in tier 2 and tier 3 cities cannot afford the price points of the same resources in tier 1 cities.

We want to bridge this gap for such students by creating a community where students can exchange information and resources at reasonable costs, irrespective of whether they choose to stay in India or go abroad for their studies.

How are you reaching your target audience in India?

A product like EduFund requires a lot of educating and building trust. That’s why we’re getting in front of parents directly. We’ve started engaging with parent communities throughout India where we’re hosting live conversations and webinars.

The idea is to create an environment where parents can express their doubts and questions about investing. So many of these parents are first-time investors and need us to help them through the process.

In addition, we’ve started to work with some sizable bank partners in India that really believe in us and our idea. No matter where a parent is from, or at what income level, wanting the best for your child unites all parents.

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