Considering a substantial loan to study overseas? Rethink that decision, advises Zoho Corporation founder Sridhar Vembu.
On Monday, the billionaire shared his thoughts on X, warning about the dangers of accumulating heavy education debts in a fluctuating job market.
He highlighted the financial risks young students encounter when borrowing large sums to earn foreign degrees, citing concerns over mounting student debt and challenging job prospects in the IT sector.
In a distressing case, he shared, a student borrowed about Rs 70 lakh (around $80,000) at an interest rate of 12% to obtain a master's degree from a small college in the United States. Amid a difficult job market, especially for foreign students in the IT field and no job in hand currently, this student now faces the burden of repayment deadlines.
"The problem: the job scene in IT is bad, especially so for foreign students and payments on the loan are starting soon," Vembu wrote.
Acknowledging that his own company's hiring has slowed down as Zoho transitions into the AI era, he noted, "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 layoffs."
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.
August 4, 2025
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…Vembu also urged caution among students and parents regarding heavy borrowing for international education, emphasising that even pursuing degrees within India can be unwise if it leads to insurmountable debt. He stressed the need for families and students to exercise financial prudence.
He underscored his belief that young people should not be trapped in debt under the guise of education. Instead, Vembu advocates for industry-driven solutions, such as companies funding training programmes and recognising alternative credentials beyond traditional degrees.
"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," he stated.
He further stressed the importance of skill development, stating, "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."
His comments come at a time when job market uncertainties have become prominent concerns among aspiring students and their families.
Last month, India's largest private sector employer, Tata Consultancy Services, announced that it would cut more than 12,000 jobs, or 2% of its global workforce. Aside from slowing global demand, the big AI reset is driving these cuts. Estimates suggest the IT industry could see 1-3 lakh layoffs.
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