'We Should Not Trap Young People In Debt': Zoho's Sridhar Vembu Warns Against Heavy Loan Burden For US Degrees

Zoho founder and chief scientist Sridhar Vembu has urged Indian students and parents to be cautious about taking hefty education loans for foreign degrees, especially amid a weakening job market. He shared the story of an IT student burdened by a massive education loan, and struggling to find a job due to both the market downturn and the shifts in US immigration policies under US President Donald Trump.

In a post on X, Vembu shared that the student had borrowed Rs 70 lakh ($80,000) at 12% interest for a master’s degree from a lesser-known US college.

“The problem: The job scene in IT is bad, especially for foreign students, and payments on the loan are starting soon,” his post read.

“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,” Vembu added, outlining that this is not an isolated case.

According to the Zoho founder, the IT sector is experiencing a hiring slowdown driven by ongoing transformations brought about by artificial intelligence. In light of this, he advised students and parents to be cautious about taking education loans, whether for studies in India or abroad.

“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,” Vembu said.

He also noted that instead of relying on formal degrees, prospective employers should focus on funding training programmes to serve as alternatives.

“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,” he said.

Vembu suggested that young people should not be burdened with loans for higher education.

“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 programmes and for the industry to broadly accept such alternative credentials rather than ask for formal degrees,” he suggested.

After being one of the highest-paid sectors for years, the IT sector is witnessing a slowdown in growth and restructuring. This is mainly due to the AI-related transformation. Moreover, Trump’s tightening of immigration policy to support his “America First” agenda is also expected to impact people seeking job and education opportunities in the US.

In 2024, Indian students constituted one in four international students in the US, which means that any significant policy shifts are likely to have a huge impact on them.