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Student Loan Bubbles

“We live in a society where we tell young people to get an education, and then we saddle them with tremendous debt.” – Elizabeth Warren

Student loan debt worldwide had surpassed $2 trillion USD. Some experts have compared the rising student loan debt to a potential financial bubble, similar to the housing market bubble that led to the 2008 financial crisis.

US Dominance

Student loan debt in the U.S. exceeds $1.6 trillion surpassing both credit card and auto loan debt, making it the second-largest consumer debt category.

Delinquency Rates

Standard federal student loan repayment terms are 10 years, but they can extend up to 25 years based on income-driven repayment plans.

Average Debt Per Borrower

Over 44 million Americans carry student loan debt. The average student loan debt per borrower in the USA is around $37,000.

Debt Levels

In the UK, student loan debt reached £121 billion by 2021.

Rising Costs

Tuition fees for UK universities can be as high as £9,250 per year for domestic students

Global Advocacy

Repayment for UK student loans typically begins when graduates earn above a certain income threshold.

China’s Loan Debt

In China, the outstanding balance of student loans exceeded 1 trillion yuan (approximately $154 billion) by 2021.

India’s Loan Landscape

India has a range of government-backed and private student loan providers. The total education loan portfolio in India crossed ₹2.7 lakh crore (approximately $36 billion) in 2020.

South Korea’s Debt Crisis

South Korea has experienced a student loan debt crisis, with the total debt surpassing 13% of the country’s GDP.

High Tuition Costs

In some African countries, particularly in North Africa and South Africa, tuition fees for higher education institutions can be relatively high compared to income levels.

South Africa’s NSFAS

South Africa has the National Student Financial Aid Scheme (NSFAS), which provides financial aid to eligible students. NSFAS disbursed around ZAR 34 billion (approximately $2.3 billion) in 2020.

Ghana’s Students Loan Trust Fund

Ghana has SLTF, which provides loans to students. As of 2021, the fund had disbursed over GHS 850 million (approximately $150 million) in loans.

“Student loan debt is crushing young people. It’s crushing their dreams. It’s a national emergency, and it’s time we treat it like one.” – Bernie Sanders

“Student loan debt is the epitome of modern financial stress. It doesn’t just hang over your head; it permeates every financial decision you make for years.” — Erin Lowry

Courtesy of CNN

Europe

Domestic Tuition: Annual fees for home students reach up to £9,250. International Tuition: International students might find themselves paying between £10,000 and £38,000 depending on their chosen field and the prestige of the institution

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Europe

Africa

The tuition landscape varies across the continent, with countries like South Africa charging between $3,000 and $5,000 annually for public universities. These figures can balloon by another 15-30% when considering indirect costs like housing, books, and meals.

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Africa

Asia

Japan and South Korea tertiary education costs can span between $10,000 and $20,000 per year, exclusive of additional expenses like accommodation and materials. Singapore and Malaysia annual expenses fall between $8,000 and $15,000 without supplementary costs

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Asia

“The roots of education are bitter, but the fruit is sweet.” — Aristotle

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10 Year Duration

Variable return funds are equity-linked funds where the returns are not fixed and can fluctuate based on the performance of the underlying assets. These trade currencies and commodity CFDs.

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15 Years Duration

Fixed return funds are fixed income funds or guaranteed return funds that offer a predetermined rate of return over a specified period. These funds primarily trade gold and other precious metals.

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"Patience is key to successful investing. It’s not about timing the market, but about time in the market"

Comparing Variable and Fixed Return Funds

Choosing between variable return investment funds and fixed return investment funds depends on an investor's risk tolerance, financial goals, and investment horizon. Variable return funds offer the potential for higher returns and diversification but come with increased volatility and risk. Fixed return funds provide stable and predictable returns with lower risk but may offer lower returns overall and may not keep pace with inflation.

10 YEAR MATURITY FUNDS

Variable return investment funds are designed to offer returns that fluctuate based on the performance of the underlying assets in the fund’s portfolio. These funds invest in a diverse range of assets such as stocks, bonds, commodities, and real estate, which inherently carry varying degrees of risk and return potential.

Performance-Dependent: The returns are directly linked to the performance of the assets in which the fund invests. If the underlying assets perform well, the returns can be substantial. Conversely, if the assets perform poorly, the returns can be minimal or even negative

Risk and Volatility: Variable returns funds are subject to market volatility. The value of the investment can fluctuate widely in response to market conditions, economic factors, and other external influences.

Suitability: These funds are suitable for investors with a higher risk tolerance and a longer investment horizon. They are ideal for those who can withstand short-term market fluctuations in pursuit of long-term growth. These funds are designed for the long haul, ideally aligning with the timeline of a child's journey to higher education.

15 YEARS MATURITY FUNDS

Fixed-return investment funds offer a predetermined rate of return over a specified period, regardless of market conditions. These funds primarily invest in low-risk assets such as government bonds, corporate bonds, and other fixed-income securities that provide regular interest payments

Guaranteed Returns: Fixed ROI funds provide a guaranteed return on investment, making them a more predictable and stable option. The return rate is agreed upon at the time of investment and does not fluctuate with market conditions.
Lower Potential Returns: Because they prioritize stability and security, fixed ROI funds generally offer lower returns compared to variable returns funds. However, the trade-off is reduced risk and predictable income..
Suitability: Fixed ROI funds are suitable for conservative investors, those nearing retirement, or anyone seeking to preserve capital and receive a steady income stream. They are ideal for investors who prioritize capital preservation over growth.

The prospectus

The funds' prospectus is a crucial document that provides detailed information about the investment funds, helping investors make informed decisions. They serve as a comprehensive guide to understanding the fund’s objectives, strategies, risks, and other key aspects