These aren’t the best of times for graduating students seeking their first jobs. Ankur Gupta, a second-year management student from Delhi, was eagerly waiting for the final round of the campus placement season to start from April 1. But the spread of the COVID-19 pandemic and the resultant lockdown derailed his plans, as his college had to close indefinitely. The placement process too was suspended. Ankur is worried. “I wonder if companies will now turn up at a later date. I might just not get a job offer in these tough market conditions,” he says. His attempts at getting help from recruitment consultants and through his college alumni network on LinkedIn to find a job hasn’t helped either. Worse, he has an education loan of Rs 10 lakh to repay.
Several job offers made to engineering and management college graduates are being revoked by companies or are getting postponed. Some companies are re-negotiating the job offers with students and reducing the remuneration package, considering the weak state of the economy.
Rohit Sethi, Director, ESS Global, Study Abroad Consultants says, “Due to the rapid increase in the number of COVID-19 cases and talks of extending the lockdown period, it is unlikely that placements would resume in April 2020 at Indian colleges and foreign universities. For graduating students in India and abroad, this is going to be tough time.”
In December 2019, a final-year engineering student from Mumbai, Shilpa Dave, got an international job offer in Europe via her campus placement. Her joining date was May 4. But, on March 16, she got an email from the company that the job offer was being revoked due to the “slowdown in their global business and uncertainty of recovery anytime soon due to Covid-19.”
Far from earning big bucks, students graduating this year need to manage their money box in a deft way. Taking a few important steps could help you tide over this crisis.
Take care of your education loan
Education loans taken from banks come with a moratorium period of up to one year after the completion of the course or six months after securing a job, whichever is earlier. This is a regular feature and is different from the moratorium that the Reserve Bank of India allowed recently. For instance, if you graduate in June 2020, then the moratorium period will end in June 2021 or six months after securing a job, whichever is earlier.
“The objective of this moratorium is to provide relief to students who cannot service their loan as soon as they start working, owing to lack of jobs or in case they are not getting adequate pay to service their education loan right away,” says Gaurav Aggarwal, Director and Head of Unsecured Loans, Paisabazaar.com. This moratorium period helps cash-starved graduates to defer equated monthly instalments (EMIs). But, the loan will continue to accrue interest during the moratorium period. This will be added to the principal component and the EMI is calculated accordingly once you start repaying the education loan.
Talk to your bank. Discuss your financial situation with your bank manager if you’ve not yet got a job or have had to settle for low-paying employment because of the depressed job market. Prashant Bhonsle, CEO, Student loans and Head Marketing of financial services platform, Incred says, “If the bank finds your application legitimate and claim to be genuine, it may extend your loan tenor. This will reduce the EMI burden immediately.”
Mrin Agarwal, financial educator and founder of Finsafe India says, “Though this is not the ideal solution, talk to your parents or siblings and see if there is a possibility of their helping you in prepaying a part of your loan. Promise them you will repay it in future.” There are no-prepayment charges in education loan. The EMI for the remaining part will be lower and may just be manageable.
Invest in yourself
If you have already got the job offer you had wanted, but the company wants to re-negotiate, consider it. It’s better than having nothing on your plate.
But if you haven’t yet got a job or if your offer has been taken back, use this time to upskill yourself. There are plenty of online courses available from portals such as Coursera, Udemy and edx. Additional certification will help you gain an edge later when the economic situation improves and the job market looks up again. It also helps your prospects when you demonstrate that you weren’t idle in this lean period and instead chose to do something about it. Read up on websites such as Investopedia.com and brush up on your finance skills if you wish to have a career in finance.
“Pursue opportunities where you can add value through projects or short-term contracts with an organisation; the aim is to be productive during these so called trying times and take experiences,” says Saurav Basu, Head of Wealth Management, Tata Capital.
Use this time to identify your weakness and work on it. Many of us are weak in communication, for instance, and we may not even realise this. A HR professional states that he often receives 6-7-pages long resumes! Use this time to work on your resume and try to shorten it. These are skills that experts say fresh graduates often take for granted and hurt their chances of getting the right job.
Don’t overspend
In an economic downturn, graduates often lose control of their finances. Avoid making impulsive purchases. Keep an eye on your discretionary expenses and avoid taking any loans till you secure a good job. Taking loans when you do not have a secure job and then defaulting will seriously affect your credit score.
Build a second stream of income
Try and supplement your income, by taking up assignments over the weekends. Of course, these shouldn’t conflict with your main job; moonlighting is always frowned upon in professional circles and is rightly deemed unprofessional. Instead, tap into your hobbies or some talent that can earn you an extra buck. Use your weekends to harness a different side of yourself than your week-long work-office personality. This supplementary income may be minimal, but if you’re good at what you do and are creative, who knows, your hobby might even become your profession in the future. That’s one way to invest in yourself in these times.
Says Basu, “Working part-time in creative fields will offer a reasonably good remuneration and you can build valuable experience. Also, you may able to increase your savings and prepay your education loan.” There is a demand for educated professionals to serve as teachers, freelance writers, photographers and researchers. At a young age, when have just graduated and have lots of weekend time at your disposal, try and use some of it creatively.
Finally, don’t lose hope. Remain calm and don’t get anxious, as these are extraordinary times. You should use your time wisely as well and prepare yourself for a better tomorrow.
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