The rising costs of higher education in India have become a significant barrier for many students, threatening to undermine the country’s aspirations for inclusive growth and development. Higher education, once considered a key to upward mobility, is now increasingly out of reach for many, especially from middle and lower-income families. Over the last decade, the cost of tuition and associated fees has escalated substantially. In 2023, for instance, the fee for a professional undergraduate course at top private institutions ranged from Rs 1.5 lakh to Rs 5 lakh per year.
This is a steep increase compared to just a few years ago, when fees were typically in the range of Rs 50,000 to Rs 1 lakh annually. Even at government-run universities where fees are relatively lower, students must often pay extra for hostel accommodation, study materials, and other incidentals, which further increases the total cost of education. This rapid inflation in education costs has come at a time when the average annual household income in India is approximately Rs 1.5 lakh, leaving families struggling to meet the financial demands of their children’s education. The situation is exacerbated by the absence of sufficient government-funded scholarships or financial aid programmes, which are critical to making higher education accessible. While schemes like the Prime Minister’s Scholarship Scheme exist, they cover only a fraction of the costs and are available to only a limited number of students, leaving the majority with no choice but to turn to private loans. The cost escalation also burdens students with loans that take years to repay.
In 2023, the National Sample Survey Office (NSSO) reported that nearly 27 per cent of students enrolled in higher education were forced to take loans to finance their education. This often results in graduates entering the workforce with significant debt, which hampers their financial freedom for years to come. The average interest on education loans in India ranges from 9 per cent to 12 per cent, making it difficult for students from low-and middle-income backgrounds to repay without a high-paying job. Not surprisingly, the high cost of education is shaping the choices students make regarding their careers. Faced with the prospect of heavy student loans, many students choose courses with higher earning potential, such as engineering, medicine, or law, rather than pursuing fields they are passionate about.
This narrowing of career options leads to a lack of intellectual diversity, which is detrimental to both personal growth and societal progress. It is crucial for the Centre to act swiftly to address the issue of rising education costs. Measures such as capping tuition fee hikes, expanding scholarship programmes, and offering interest-free loans to students from lower-income families can go a long way in making higher education more affordable. Furthermore, universities should be encouraged to maintain transparency in their fee structures