NEW DELHI: Over the past year, the takers if education loan have risen in the country. As per the data released by Reserve Bank of India, RBI the number of Education Loans granted in 2017-18 increased by 32%. The trend, however is skewed as more than 60 per cent of the numbers belong to southern states. Around 65% of the students hail from Tamil Nadu, Maharashtra, Kerala, Andhra Pradesh, Telangana and Karnataka. As per the data, a 13% decline was seen in 2016-2017. But, this year a tremendous increase is seen in number of Education Loans granted – hinting at a positive push to Higher Education in India.
Highest number of education loans are offered by Public sector banks than Private sector banks. The State Bank of India has alone granted education loan of Rs. 4,146 crore to 3.2 lakh students. Canara Bank stood second in granting Rs.1,952 crore loans to 98,400 students.
The banks provide a period of 15 years for the repayment of these education loans. When the students are completed with their studies, the loans are subjected to one year moratorium for payment in all the cases.
Since last four years there has been a consistent trend which shows that the above mentioned states have had the most number of young students availing education loans and consuming most of the money. Expert says that, around 5.8 lakh out of 8.9 lakh students belong to the Southern states. Thus, reflecting the accessibility to higher education provided by the states.
Aarin Capital Partners Chairman TV Mohandas Pai said,” The aspiration levels in South India is considerably higher compared to the rest of the country, which is why you see students from all financial backgrounds applying for all professional courses. However, not all of them managed to avail merit seats, which means they are paying to get into colleges. Also, they don’t always get into the top Institutions which makes them unemployable and thus, making the loans a burden.”
Pai suggested that the government should lend a helping hand in reducing the indebtedness of young students and said, “The worst thing we could do to young Indians is to make them start their careers in debt. The solution therefore, is for the government to create a corpus of about Rs. 50,000 crore. Again these funds must only go to students going to pre-qualified colleges, which could be ranked by National Assessment and Accreditation Council, NAAC.”