Despite the steady growth of education advances over the past decade, given the onerous terms and conditions under which study loans are sanctioned, less than 10 percent of the 30 million youth enrolled in institutions of higher education in India avail of them. Thus, in order to revitalise India’s malfunctioning high-interest education loans system, the Union Budget 2015-16 aims to establish a Student Financial Aid Authority to administer and monitor scholarships and education loans. Public sector banks have a vital role to play in this mechanism.
Few of the public sector banks endowing student loans are as follows:
1. SBI Student loan: It offers a term loan, which is granted to Indian Nationals for pursuing higher education in India or abroad where admission has been secured. It covers expenses such as:
• Fees payable to college/school/hostel
• Examination/Library/Laboratory fees
• Purchase of Books/Equipment/Instruments/Uniforms
• Purchase of computers- essential for completion of the course (maximum 20% of the total tuition fees payable for completion of the course)
• Travel Expenses/Passage money for studies abroad.
2. Punjab National Bank Scholarship Scheme: Their education loan is called ‘PNB Sarasvati’. It aims to provide financial support to meritorious students for pursuing higher education in India. It is offered for approved courses leading to Graduate/ Post Graduate degree and PG Diplomas conducted by recognized colleges/ universities recognized by UGC/ Govt. / AICTE/ AIBMS/ ICMR etc. On the other hand, ‘PNB UDAAN’ aims at providing financial support to meritorious students for pursuing higher education abroad. The scholarship is for job oriented professional/technical courses offered by reputed universities. For example, MCA, MBA, MS and courses conducted by CIMA- London, CPA in USA. Even degree/Diploma courses like aeronautical, pilot training, shipping etc are acknowledged provided these are recognized by competent regulatory bodies in abroad for the purpose of employment in abroad.
3. Allahabad Education Loan: The objective of the scheme is to provide financial support to meritorious students for pursuing higher education in India and abroad. The meritorious Students under management Quota are eligible for Education Loan. It is mandatory that the student should be an Indian National and should have secured admission to a higher education course in recognized institutions in India or Abroad through Entrance Test/Merit Based Selection process after completion of HSC (10 plus 2 or equivalent). Loans for studies abroad are granted for job oriented professional / technical courses offered by reputed universities.
4. Union Bank of India: It offers student loans for studies in India – maximum up to Rs. 10 Lakhs. The quantum of loan is higher for the institutes covered under Special Education Loan schemes. Also, the Ministry of HRD has launched Central Government scheme of Interest Subsidy on educational loans for economically weaker sections of the society.
Thus, over the past few years, the public sector banks have started to play a pivotal role in helping the growth of education sector in India.