Education Loan options in Australia

Australia is fast emerging as one of the most preferred higher education destinations for international students in the world. In the year 2018-19, nearly 870,000 students enrolled themselves in various degree courses in different universities and colleges in Australia. This number was about 8.8 percent higher than the number of international students enrolled in the previous academic year i.e. about 800,000.

Other than world class infrastructure and facilities, Australian universities also provide cheaper alternatives to relatively costlier degree courses offered to international students by universities and colleges in the United States. This is mainly due to relatively lower currency exchange rate of Australian Dollar (AUD) in comparison to US Dollar (USD).

In this blog, Student Cover provides you information on the cost of higher education in Australia and various education loan options available to students, especially Indian students to finance their higher education down under.

Cost of higher education in Australia

Like in India, Universities in Australia are autonomous when it comes to deciding the fee structure for various courses. These fees vary depending not only on the type and level of study program but also based on which university or college that a student is applying to. One must note that the cost of similar education in a top-ranked university might be higher than those of lower ranked institutions.
According to an estimate, average tuition fees for international students studying in various universities in Australia in 2019 are given in the below table:

Program	Range of Avg. fees
UG Degree (bachelors)	AUD 20,000 – AUD 45,000
Graduate Degree (masters)	AUD 22,000 – AUD 50,000

For top ranked universities in Australia such as Australian National University, University of Sydney and University of Queensland the average fees was higher than normal and ranged between AUD 28,000 to AUD 57,000. One must note that for certain courses such as medicine and business management, the tuition fees could go as high as AUD 60,000 per annum.

Student Loan options for Indians to pursue higher education in Australia

International students who wish to pursue higher education in Australia have several education loan options

depending on their needs and requirements. These student Loans not only help finance tuition fees but also meet cost of living in Australia for the duration of their study program.

In India, Student Cover, in association with major domestic and international Banks and Non-Banking Finance Companies (NBFCs) provides education loans for both graduate and undergraduate degree courses. For students pursuing a degree in STEM (Science, Technology, Engineering and Mathematics) stream, Student Cover also provides unsecured loans of up to Rs. 40 Lakhs through its partner banking institutions.

For the convenience of readers, we have compiled the information on student loans in simple Q & A format.

FAQs on Student Loan options for higher education in Australia

Q. What is the maximum unsecured loan offered for degree course in STEM stream in Australia?

Ans. Depending on factors such as CIBIL score, income, course and intuitions, banks in India may offer up to Rs. 40 Lakhs (about AUD 74,000) to finance degree course in STEM stream in Australia. As far as Non-Banking Financial Companies are concerned, they offer between Rs. 15 to 20 Lakhs with repayment mode being direct simple interest.

Q. What is the maximum unsecured loan given for Non-STEM courses in Australia?

Ans. For non-STEM courses also, banks offer upto Rs. 40 Lakhs depending on factors mentioned in previous question. NBFCs on the other hand offer up to Rs. 25 Lakhs to students to pursue degree course in non-STEM stream with repayment mode being direct EMI.

Q. What is the interest rate for unsecured loans for Australia?

Ans. Student Cover provides education loan to students, at best possible interest rates, through its partner lending institutions. At present, the interest rate for unsecured education loans, offered by banks, ranges from 10.5* percent to 12.25* percent whereas the rate of interest charged by NBFCs ranges from 12* percent to 14* percent.

*Interest rates are subject to change

Q. What is the maximum amount of secured loan offered for study in Australia?

Ans. Since secured loans are offered in return for collateral the volume of the loan depends on the value of the collateral that the borrower is willing to mortgage in return. Students can get up to Rs. 1 crore as education loan from banks to finance their higher education in Australia.

Q. What interest rate is charged on secured loans offered to finance higher education in Australia?

Ans. Since these loans are more secure in nature and are only offered in return for collateral, the interest rates on secured loans are lower than unsecured ones. In India, banks offer secured student loans at interest rates starting from 8.1* percent going up to 11* percent. NBFCs, on the other hand, charge an interest starting from 10.5* percent going all the way to 13* percent depending on host of factors such as the course, country and the quality of asset offered as collateral.

*Interest rates are subject to change

Q. What is the Moratorium for education loan for Australia before EMI starts?

Ans. Moratorium is the time given by lenders after which the borrower has to start repaying loan in the form of Equated Monthly Instalments. Usually lenders offer a moratorium on repayment extending up to completion of the duration of the study program. In case of unsecured loan however, a student is required to start repaying the loan in the form of simple interest (SI), even if not Equated Monthly Instalments (EMI), from the date of reimbursement of the loan amount by the bank in favour of the student. Nationalised banks on the other hand offer moratorium till completion of the course.

Q. What are the minimum requirements for getting an unsecured loan to study in Australia?

Ans. As mentioned earlier, since secured loans are given without collateral and based on factors such as an individual’s family income and CIBIL score, the loan applicant has to ensure that in order to get unsecured loan to study in Australia, their monthly income is not less than Rs. 1 lakh per month. Ideally, the applicant should have a monthly income in the range of Rs. 1 to 1.2 lakhs per month and CIBIL Score of above 750 in order to get his or her loan approved by the lending institution.

Q. Which Banks and NBFCs are in tie-up with Student Cover for education loan in Australia?

Ans. Student Cover has tie-up with leading Indian banks such as the ICICI Bank and the AXIS Bank through with it provides secured and unsecured education loans to Indian students going to Australia for higher education. It also have tie-up with Non-Banking Financial Companies such as INCRED which are dedicated lending institutions specializing in different categories of education loans.

Let’s Wrap Up

Australia is a major destination for higher education in the world. Due to high quality of education and lower cost, most students view Australia as a cheaper alternative to countries like USA and UK. The average cost of under-graduate and post-graduate degree course in Australia ranges from AUD 20,000 to AUD 50,000. However, the cost of education also depends on the university. The tuition fees for top ranked universities as well as for courses in medicine and management could be much higher. Student Cover offers a wide range of education loan options to students to finance their studies. It provides unsecured loans of upto Rs. 40 Lakhs and secured loans of upto Rs. 1 crore through its partner lending institutions to Indian students.

Disclaimer: The content of this blog is based on personal research of the writer. Reader’s discretion is advised. Neither Student Cover nor the writer will be held responsible for any wrongful interpretation of the content of this blog.