Finance That Transforms Life
By: Ricardo Fernandez, Chief Marketing and Sales Officer, Prodigy Finance
University students have a reputation for effecting change, and one of the most significant developments ever seen among tertiary students is underway right now. It’s happening with the support of the fintech sector.
Across the globe, a growing number of students are looking beyond the campuses of their own nations to secure a high-quality education that meets their long term ambitions. More importantly, many of these students are leaving homes in developing nations in search of a degree from a top-ranking global university.
As a measure of their swelling numbers, in 2015/16 the United States played host to over 1 million international students, up from 565,039 in 2004/5. Over 127,000 non-European Union students are currently attending school in the United Kingdom and 91,215 of these students come from China alone.
A range of factors are driving these students to say goodbye to the familiarity of their home countries and families in pursuit of an international education— just look at the vanguard of change and it’s likely university students will be there. As global communities become more connected, students are embracing opportunities to combine experiences of other cultures with a quality education.
Also among these factors is the emergence of a growing middle class, particularly in some of the world’s most populous nations such as India and China. The annual costs of attending a high-ranking school far exceed average disposable incomes in these countries and it could be argued that average disposable incomes for the top one percent of households in China and India better reflect those who would consider studying abroad. Even among these households however, the average savings of a person with three years of work experience represents less than 40% of the total cost of attendance. Clearly, this funding gap represents a significant hurdle.
The increasing awareness and prestige attached to the world’s top universities, coupled with continuing globalization that sees 60% of employers actively seeking, or attributing greater value to, an international education experience when recruiting talent.
On the other side of the leger, universities are marketing their services to foreign students to enhance diversity on campus and support their drive to improve their global academic rankings. This sheer weight of numbers is making international students a catalyst for change, not just in universities themselves, but also in global credit markets, which have been the source of inspiration for Prodigy Finance’s unique and inclusive borderless credit model.
The rising global mobility of students has not yet changed traditional banking systems. It has however, fuelled innovations in the fintech sector that have allowed students, especially those from developing nations, to markedly expand their choice of university. Big data and data analytics are critical to many fintech firms. This allows predictions of the risk each consumer presents, and in turn the delivery of customized products based on that risk.
Fintech firms are filling the gap— thanks to student lending (sometimes with global fund transfers,) loan consolidation or refinancing, credit cards and digital banking— and empowering more students from developing nations to achieve their goal of studying internationally. These fintech firms represent more than a good investment to their stakeholders, they are changing the face of education and playing a role in reshaping equality of education globally.
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