Educational loan offtake increases 10% in three years.
There's another indicator that more students are going to college -at least one lakh accounts have been opened in public sector banks to service education loans in the last four years.In March 2011, 22.1 lakh accounts were created for educational loans, which rose to 25.7 lakh by March 2014, a 10% increase in three years. The number could go up by around 50,000 accounts after the admission season is over, experts say .
Borrowing has been on the rise ever since public sector banks came up with a number of schemes. A senior official from Mumbai said, “` `10 lakh is the upper limit for education loans for study in India. For those going abroad, it is `20 lakh.“ For loans less than Rs 4 lakh, there is no need to provide security or guarantee, but both parents have to be joint borrowers.
In the Tamil Nadu engineering counselling, more than 30% of students in the first three days were first-generation learners and many were from rural areas and planned to avail of educational loans.
“I am a farmer and I don't earn enough to fund my son's higher education,“ said P Sampath, father of S Ramu, a student who has chosen computer science engineering in Anna University, Guindy campus. Sampath has applied for a loan in a public sector bank in Chennai.
“Today, fees in a government college is around Rs 30,000 a year. In private colleges, it is between Rs 70,000 and Rs 1 lakh a year,“ said a senior official of a public sector bank from Chennai. “The average Indian, who earns around Rs20,000 a month, cannot afford education without a loan,“ he said.
Many banks also offer interest-free educational loans to students.
Borrowing has been on the rise ever since public sector banks came up with a number of schemes. A senior official from Mumbai said, “` `10 lakh is the upper limit for education loans for study in India. For those going abroad, it is `20 lakh.“ For loans less than Rs 4 lakh, there is no need to provide security or guarantee, but both parents have to be joint borrowers.
In the Tamil Nadu engineering counselling, more than 30% of students in the first three days were first-generation learners and many were from rural areas and planned to avail of educational loans.
“I am a farmer and I don't earn enough to fund my son's higher education,“ said P Sampath, father of S Ramu, a student who has chosen computer science engineering in Anna University, Guindy campus. Sampath has applied for a loan in a public sector bank in Chennai.
“Today, fees in a government college is around Rs 30,000 a year. In private colleges, it is between Rs 70,000 and Rs 1 lakh a year,“ said a senior official of a public sector bank from Chennai. “The average Indian, who earns around Rs20,000 a month, cannot afford education without a loan,“ he said.
Many banks also offer interest-free educational loans to students.
Source: The Times of India dt 19-7-14
