You want to do an LLM abroad. But the numbers are simply out of your reach. We mailed the details yesterday, you can read my email titled “How much does a foreign LLM cost?”
After all, an LLM from Ivy League universities can cost easily between INR 45 – 70 lakhs just in tuition fees. In the USA, the cost of living, even if you live frugally, will get you short by INR 10-30 lakhs every year depending on the location of your university, California and New York being the most expensive places to live in.
Likewise, in the UK, you will easily need more than INR 30 lakhs every year should you choose to do your LLM from there.
For most of us, this becomes an issue. Unless you have unlimited money, you can’t just come up with money like this for your master’s degree. So what can you do to fulfill your LLM abroad dreams? What are your financial options?
My colleague and I researched and discussed the funding options to study LLM abroad in length and here is the output of the said research.
6 ways you can fund your foreign LLM
Education loans from traditional banks – Many banks all over the world offer education loans for pursuing higher studies abroad.
For example, Indian banks like the HDFC Bank, Canara Bank, the State Bank of India (SBI), Punjab National Bank (PNB), ICICI Bank, South Indian Bank (SIB), Bank of Baroda, etc offer education loans. On average, their interest rates vary from 8-15%.
While SBI offers a rate of 8.65 per cent, the rate is higher at private banks, starting at 9.55 per cent at HDFC and 10.5 per cent at ICICI.
Some of these Banks have an upper cap on the loan amounts. But don’t worry, those upper caps are pretty much high. For example, if the SBI and the SIB have an upper limit of INR 1.5 crores, you can draw loans upto as much as INR 1 crores from the ICICI Bank, INR 80 lakhs from the Bank of Baroda, and INR 75 lakhs from the ICICI Bank. These can cover your foreign LLM expenses and much more than that. Some like the PNB have no upper caps in the loans they offer.
However, just because the bank has the option to give educational loans does not mean you can get it. Beyond 4-5 lakhs, all banks will insist on you providing them with collateral security to secure the loan. This means you need to mortgage a property that is significantly more expensive than the loan amount you are asking for in order to get that loan.
To get a loan of Rs. 50 lakhs you need to mortgage or offer as collateral security a property worth Rs. 70-75 Lakhs.
If you do not have that kind of property to offer as security you simply will not be granted a loan.
So getting through an Ivy League university is not enough. You need to be able to afford it.
But how much time will it take for you to pay back this loan?
Say at the age of 25 years, you decide to do an LLM from the USA and you are fortunate to have a property you can put as a collateral to avail a Rs. 50 lakhs loan from SBI.
SBI’s interest rate is 8.65% and there is something called a moratorium period and your EMIs begin only after this moratorium period. Generally, the moratorium period in an education loan is 6 months after your course completion or after you get a job, whichever is earlier. During the moratorium period, you only start paying the annual interest accrued on that amount.
Let us assume you take a loan for a 1-year course:
The principal amount is ₹50,00,000 at 8.65% fixed interest rate (in reality you may have to pay an interest rate that is 10% or more)
We assume that you can start paying Rs. 50k every month for an education loan after 1 year of your studies. That means you would need a job that pays you at least ₹1 lakh-1.5 lakh, depending upon your lifestyle, in order to afford the EMI of the education loan and to sustain a financially independent lifestyle.
I have used a simple EMI calculator to ascertain how much time you would need to pay off the ₹50 lakh loans and what will be the final amount you would pay
You will need 15 years to complete this loan, which means only by the age of 40 will you get rid of the liability that you took at the age of 25.
And what if you were not able to find a well-paying job after your LLM? You will end up losing the property you offered as collateral, which can cause you a massive loss as banks may sell it for less than market value to quickly recover NPA.
You need to be very sure that you can pay the loan back from your income before you take a loan like this! You need to have a clear plan and understanding of how you will pay the loan back before you take a financial risk like this.
On the brighter side, if you get a job in the US that pays at least $100,000 per year, now or a couple of years down the line, paying this loan will not be a challenge for you at all.
Also, remember that these banks check your creditworthiness before approving your loan. Indian banks mostly do this by checking your CIBIL-score. A higher CIBIL-score ensures a higher probability of your loan application is approved. So, please get an idea of your CIBIL-score before applying. Most banks have a system of checking your CIBIL-score, for which you have to fill out and submit their requisite forms. Also, they will want your parents to become guarantors to your loan, so it helps if they have a good financial history.
In Nigeria, you can avail education loans for foreign education through multiple sources such as the WEMA Bank, MPOWER Financing and Prodigy Finance, etc. Most student loans require cosigners or collateral to mitigate risk for the lender. Typically, the cosigner must be a U.S. citizen or permanent resident with good credit-scores for Nigerian applicants to avail education loans and study in the US or Canada.
Again, in Pakistan, the National Bank of Pakistan, in collaboration with Habib Bank Limited (HBL), United Bank Limited (UBL), Muslim Commercial Bank (MCB) and Askari Bank Limited (ABL) has an SLS (Student-Loan-Scheme) in place. If you are a meritorious law student from Pakistan who has secured above 70% in your LLB, you can always apply provided you are within the relevant age cap.
International banks like the Alfalah and Standard Chartered Banks also have student-friendly education loans in place for Pakistani students.
Like India has CIBIL, other countries have their processes of measuring your creditworthiness.
Let’s face the truth, not everyone can get a loan for studying in a top university abroad which can be very expensive. What are the alternatives?
2. Fellowship – Fellowships are primarily of two types: taught fellowships – where you have to teach junior students as a teaching assistant – or, research fellowships – where you have to assist senior professors with their research.
This is applicable once your LLM application has been approved by your university of choice. You need to approach your university or check their website to find out what all scholarships they are offering, what are the criteria, and if you fulfill the same.
Many foreign universities like NYU, UC Davis, etc have their fellowship programs for LLM students. Most UK-based and European universities also offer scholarships for their different LLM courses.
However, these fellowships are extremely rare and are generally bagged by toppers of the college. Also, to get a fellowship like this, you need to build a stellar CV and network with academics in those universities for years ahead of applying. It is difficult to pull off within months.
Also, these fellowships are favorable to those who would want to make a career in academics and research since many of them are open for students wanting to do Ph.D. after their master’s studies.
3. Getting your LLM sponsored by your employer – You can enter into an arrangement with the law firm that employs you. Your firm will pay for your tuition, and maybe even living costs during the course. This, of course, is done through a written agreement. You will have terms to oblige with. For example, you may need to return to work with new skills and stay with the firm for an agreed amount of time – say 5 – 10 years.
In some cases, your employers might require you to sign on a bond and pay a bond amount for an agreed period of time, refundable by them once you fulfill your contractual obligations. This can be a great option if you are looking to upskill yourself while maintaining your job security. However, finding employers who will do this for you can be very difficult.
This is not a realistic option for most law graduates. However, if you have been working with a good law firm for more than 3-4 years, you can explore if they will be willing to finance you partially or at least advance a loan to make it possible for you to pursue your dream LLM.
4. P2P education loans from NBFC-s – There are many peer-to-peer (P2P) lending platforms like BankBazaar-Lendbox, Faircent, PaisaDukan, OMLP2P, Monexo, i2iFunding, and LenDenClub which are registered as NBFC-s under the Reserve Bank of India.
Their new-age tech-based operations result in lower turnaround times for screening applications. P2P lending platforms work much faster than traditional banks. These FinTech platforms connect borrowers directly to lenders, known as investors, who loan money to qualified applicants.
P2P-s rely on smart ways of screening applicants by using data-analysis, AI and other smart-tools to reduce decision-making time. Their streamlined screening process is based on spending patterns, creditworthiness etc of the applicants. Due to their shorter turnaround times and customer-friendly application processes compared to traditional bank loans, taking education loans from such P2P lending platforms has become a rising trend of our times.
Another advantage of these P2P lending platforms is the high upper-cap. For example, in India, the RBI has increased the ‘aggregate exposure limit’ of loans that a P2P can offer to individual loan-seekers to INR 50 lakhs.
P2P lending is legally regulated in larger and fast-growing economies like the USA, the UK, China, India, Australia, New Zealand, Germany, Sweden, Canada, Israel, Korea, Sweden, Brazil, Ireland, Indonesia, Bulgaria, and even Latvia! Elsewhere, though P2P lending is not regulated per se, they are not illegal de jure and very much in de facto practice.
Some P2P lending platforms like Avanse and inCred have a global base and are incredibly fast-growing Fintech startups today. In India and Pakistan, P2P-lending platforms offer education loans at an interesting range of near about 12-18%. While the interest rate is much higher in P2P platforms, a lot of people who get rejected by banks can get their loans here.
To raise beyond Rs 7.5 lakhs, even in P2P loans, you will have to provide collateral. If you can’t provide collateral or security for your loan, this may not work for you.
5. Working part-time in a remote start-up or remote freelance jobs for exposure as well as money – The US will become a startup-dominant industry by 2027. More and more startups today are open to hiring people remotely. Many new and boutique law firms have also emerged to cater to the needs of the startup ecosystem. You can work remotely as a lawyer or even as a paralegal for these places for a few hours every day or week and save up money for your LLM expenses from what you earn!
This is possible because you can earn more by working remotely for US startups and lawyers from a developing country as a remote freelancer. For example, it is quite easy to earn $2000 per month by doing full-time remote freelance work if you acquire knowledge of US laws from online courses and build up a good profile for US legal work as a remote freelancer. You can go higher from there over time as you raise your hourly rates with experience and a good track record. If you live in a developing country, you may be able to save a major part of that income so you can then get an elite US law degree.
If you are taking this route, give yourself at least 3 years and aim to save at least $10k per year.
Even a law student can easily earn US$200-300 per month by devoting only a handful of hours every week. What is best about this route is that you are already building clientele, industry-specific knowledge, track record, and relationships in the USA which means when you actually land up there physically to do an LLM, you will be miles ahead of your competition and will probably find it very easy to land a good job there and find someone to sponsor your employment visa!
6. Crowdfunding – There are many crowdfunding platforms all over the world. Through crowdfunding, which is basically people donating for your studies out of goodness of their heart which may enable you to do your LLM. Even in India, many students have successfully taken help from crowdfunding platforms like Milaap, Ketto, and Indiegogo to fund their foreign education. My acquaintance, 27-year-old anti-caste activist and rapper, Sumeet Samos Turuk, made news last June when he raised Rs 38 lakh in 3 hours for studying at Oxford.
I don’t see myself being able to raise money from either of these 6 ways
I know a lot of you will find none of these as a viable pathway to financing your LLM, primarily because you cannot access such large educational loans due to lack of collateral or property you can offer as security to the lender.
Is there an alternative?
You can get an unsecured loan for upto Rs. 5 lakhs.
The most sensible path when you cannot afford such an expensive foreign LLM is to opt for an online LLM that is inexpensive and you can manage to do under Rs 5 lakhs. Some online LLMs will give you an opportunity to travel to campus for a limited time to experience the campus as well as do networking and job searches in that country. You should aim for these.
What happens to the Ivy League or Oxbridge dream in that case?
Use your inexpensive online LLM as a staircase. Use that credential to get remote freelance work, build a track record, find ways to migrate through your employer if possible. As you become financially stronger and build more networks in the country where you are trying to migrate, it will eventually become easier for you to do another LLM if you still want to from one of the top brand colleges.
However, if you can’t finance an Ivy League or Oxbridge LLM, there is no reason for discarding your LLM plans altogether. Be strategic.
Sometimes you have to take one step backward before you can move forward. Stay focused on your goal and do what you have to do.
We have told you of 6 ways in which you can fund your LLM degree from a foreign university of your choice. Hopefully, it will work for some of you. Can you think of other options? Do you have to add anything about the pros and cons of these options? We are eager to hear your views on these.
Also, come to our Bootcamp, Ramanuj and Abhyuday will be live with you sharing more opportunities and insights on how you can do your LLM abroad and more financing options. They will also tell you how you can make the most out of your LLM year by preparing yourself ahead of time.
Would you like to be there?