An Analytical Study Of Growth Of Education Loan In India

Skill based and professional higher education is essential to social, cultural and scientific temper development and economic growth of a nation. India is the largest youngest populous country in the world. Therefore, higher educational institutes have to be established to improve the quality of human resources. However, withdrawal of government support to higher education by the central government promotes relatively expensive privatisation of higher education. In 2021, 40 percent universities, 61 percent colleges were privately owned and run high demand Engineering, Medical Science, MBA and Pharmacy courses across India. Central government has been providing interest subsidies on the education loan for the merit and economically backward students for professional education. However, most of them are unable to make repayment of loans because of high dropout, education failure, absence of job opportunity, low salary and so on. The total outstanding education loan was Rs. 101064 crore in March 2023. According to the Reserve Bank of India, Non-performing assets of the education loan stood at 7.82 percent in the first quarter of 2022. This increasing NPA of education loans makes the banks cautious sanction loan. Although, it is essential in any circumstance to continue financial support from banks and government to students for higher education to obtain a demographic dividend of quality human resources for the economic development of a nation. Researchers suggest that government, educational institutions and banking associations should do empirical study early to ascertain the risk factors in education loans and restructure the loan process rather than avoiding loan sanction. It will be helpful to India become a global leader in human resource rather than economic development.