Modest placements at engineering, business schools spark repayment concerns

livemint.com:

MUMBAI : It has been a tepid student placements season so far at India’s engineering colleges, and a similar lull is expected in business schools, particularly in the small cities. But for some, there's a bigger worry: without a job straight out of college, or jobs at lower salaries than expected, students who’ve borrowed lakhs of rupees to fund their expensive education might struggle to repay. While banks and non-banks—the ones who should be concerned—do not seem perturbed, faculty members Mint spoke with fear that the number of students defaulting on their loans could rise on the back of an estimated drop in median salaries.

“The fees (at the Indian Institutes of Management) can range from ₹25 lakh to a little over ₹30 lakh. If the hiring sentiment remains muted then the number of students defaulting on their loans will increase, and this will specially be a concern for students from the newer IIMs and the second-rung colleges," said a faculty member at IIM-Calcutta, asking not to be identified. Campus placements at both engineering and B-schools, irrespective of their hierarchy, have been a cause of concern.

At India’s premier engineering college—Indian Institutes of Technology—the number of offers rolled out by consulting, core engineering, and trading companies has dipped compared with the previous year. B-schools will start their campus placements from February. Recruiters Mint spoke with said they had over-hired earlier and did not have enough vacant profiles to justify visiting campuses in large numbers this year.