Zoho's Sridhar Vembu has a big warning for students entering IT industry, hints at a 'borrowing' crisis hurting young people

Economic Times

2 days ago

Synopsis
A student's ₹70L debt for a US master's degree highlights the risks of heavy borrowing for education, especially with a challenging IT job market. The author urges caution, advocating for employer-funded training programs and industry acceptance of alternative credentials to prevent trapping young people in debt. Companies should invest in skill development.
Agencies Zoho founder Sridhar Vembu on Monday took to X to highlight the financial risks students face when burdened by hefty education loans in an unpredictable job market. He cautioned against borrowing large sums to pursue foreign degrees, especially when job opportunities are uncertain. Citing a real-life example, Vembu shared the story of a student who took a loan of around Rs 70 lakh (approximately $80,000) at a steep 12% annual interest to study at a lesser-known U.S. university. With limited job prospects—particularly for international students in the IT sector—the student now struggles to meet repayment deadlines without stable employment.
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. The problem: the job scene in IT is bad, especially so for foreign students and payments on the loan are starting soon. 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. 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. "A Tsunami of this is coming ! Most governments are not ready to handle mass unemployment , not just IT," said one user.
Another user said, "I support higher education when admits are to good colleges. College experience is still useful for getting new perspectives at a young age. But so many of our youth are chasing useless degrees which adds no value than a course done for free online.""Very hard for freshers to land in a job if they don't get selected through campus placement. I feel companies should hire from broader pool. I also felt the same struggle right after my college days. It is also important to revise courses and adapt US style college education having ability to choose the topics that they can study. Even with same college degree we would get people excel at various areas, by investing deeper into their interests," said one user.