Education is a luxury good. A sentence that has never been more true today.
Student loan has been a major deal in other countries, but not for Indonesia. As the history goes, tuition fee at Indonesian public colleges could only be paid in installments, upfront, or through scholarships. Loaning tuition fee were seen as a big task due to the lack of protection towards students. Online student loans, which require no collateral or down payment, have also never been a familiar option.
However, a news has stunned Indonesians: Institute Technology Bandung (ITB), a top public university in Indonesia stated that they are partnering with Danacita as an official online student loan partner. Could online student loans be good for their business? Or forever break their reputation as a dependable and reputable university in Indonesian?
Danacita is a tech firm affiliated with ErudiFi, with ErudiFi Private Limited as a significant stakeholder, originates from Singapore. Danacita method involves offering economical education financing options for both students and working professionals. Since 2018, Danacita asserts that it has established collaborations with several public and private universitie as partners in providing affordable educational financing services. Among them are UGM, ITB, and UNS. The application procedure is conducted online, while payment terms span from 6 to 24 months, with no collateral or initial payment necessary. Danacita is not the only one, other education financing platforms are also emerged in Indonesia, such as DanaDidik, Pintek, Koinworks, and Edufund.
Yet, the emergence of online student loans in Indonesian universities begs the question: who are their target demographics? These services are smart enough to target an overlook students. Those who do not fall in underprivileged students category, yet lacking the financial resources to pay for their education upfront and require financial assistance to pursue their studies.
From A Business Standpoint
Partnering with online student loan providers could potentially generate additional revenue streams for universities. While the terms of these partnerships may vary, universities could receive referral fees or other financial incentives for directing students to these loan platforms. This additional revenue could be reinvested into the university to improve infrastructure, facilities, and academic programs, ultimately enhancing the overall student experience.
Universities partnering with student loans comes with a price. One concern is the impact on the institution’s reputation. Historically, universities in Indonesia have prided themselves on providing affordable education without the need for student loans. By endorsing online student loans, universities may be perceived as prioritizing financial gain over the well-being of their students.
Ultimately, the question of whether student online loans will save Indonesian universities hinges on a complex interplay of cultural values and perceptions. While these loans offer a lifeline for students seeking educational opportunities, universities must tread carefully to ensure that their partnerships align with their core values and commitments to student welfare.
Culture and Perceptions
According to Hofstede’s Cultural Dimensions (1980), there are five dimension of cultures: Individualism-Collectivism, Masculinity-Femininity, Power distance, Uncertainty Avoidance and Performance Orientation. Hofstede’s Cultural Dimensions stated that collectivism members look after the benefits of the social group as a whole and conform to the norms of the group (McSweeney, 2002).
Using these dimensions, it becomes clear that Indonesian culture values collectivism, collective well-being and a strong emphasis on education as a pathway to success and social mobility. They acknowledge the importance of supporting one another within the community. These cultural nuances influence how Indonesian society views issues, including education.
In the context of education, there is a prevailing expectation that institutions and government entities should prioritize accessibility and affordability to ensure that all members of society have equal opportunities for academic advancement. Especially when we are talking about public universities. It seems like any initiative that appears to prioritize profit over the welfare of students may be met with skepticism and resistance.
Moreover, education is deeply remembered in Indonesian society as a means of upward social mobility. However, access to quality education remains unevenly distributed. Therefore, the introduction of student online loans represents both a promise and a potential threat. While it offers a lifeline to students who would otherwise struggle to finance their education, it also raises concerns about widening inequalities chances to pursue higher education.
Indonesian Universities will be saved by a commitment to accessibility and affordability. Only by mastering balance between financial viability and educational integrity can Indonesian universities navigate the evolving landscape of higher education in the digital age. Yes, we sure need a hell lot of good luck.
Reference
McSweeney, B. (2002). Hofstede’s Model of National Cultural Differences and their Consequences: A Triumph of Faith — a Failure of Analysis. Human Relations, 55(1), 89–118. https://doi.org/10.1177/0018726702551004
