Universities must have diversified financial model and can implement “Study now, pay later” scheme, says former director of IIT Delhi

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Former Director of the Indian Institute of Technology (IIT) Delhi, Prof. V Ramgopal Rao has advocated for a “Study Now – Pay Later” inspired financial model for publicly funded universities in India. Rao, in a tweet, said that with the expansion of higher education in India, the grant model for public universities in India was not feasible and another source of funding was needed. “Institutions must have a diversified financial model to support the growth and excellence of their businesses,” reads his message.

He said that the current government grant model must take into account the number of students, the cost of education in the institutes, recipients of competitive research grants, patents filed, royalties collected and others. Similar factors should also be considered when deciding on the HEI grant. .

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Rao added that a “Study Now – Pay Later” program similar to Australia’s Higher Education Loan (HELP) programs could be one of the options. HELPs are interest-free loans given to students to complete their higher education. The former director of IIT added that the program was “excellent” and should be considered for higher education institutions in India.

Although the loans are generally interest-free, the outstanding amount is indexed annually according to the Consumer Price Index (CPI) to maintain the real value of the debt. The borrower of loans under HELP is only required to repay their loans when their taxable income reaches a certain threshold. The rate at which debt is repaid increases with taxable income, he added.

In a previous article, Rao criticized private universities for underpaying their faculties. “Faculty salaries in private universities are an issue that needs to be addressed in India. Huge campuses, fancy buildings and TV commercials don’t make a good #university. This is the #FACULTY. Most of them don’t even pay 7th Wage Commission salaries which is atrocious,” he tweeted. Labeling UGC’s official pages, Rao called for a uniform pay standard to be enforced to ensure that quality faculty were also available at private universities.

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