A few decades ago higher education was not in the reach of many except for those scoring first divisions in their higher secondary exams and enjoying the loan scholarships granted by the state governments. But the scenario has changed since then and now a majority of the students with reasonable scores in the exams have started availing the educational loans made possible by the financial institutions liberally and at times vying with each other in disbursal of targeted sums in the presence of V.I.Ps.
The students are lucky to get loans for a variety of courses not only in India but also abroad. The employment opprtunities are also on the increase but not at the speed to all of them in which they are offered loans by the banks. In Tamil Nadu esp due to the efforts of Mr P.Chidambaram, the then Union Minister of Finance, the educational loans were disbursed with a vengeance. The aim was indeed praise-worthy.
Sometimes the provision is misused in such away that the undeserved too do get into the queue and the unscrupulous and mischievous staff in the banking sector has played a negative role resulting in the increase of non-performing assets (NPA) in educational loans. The latter stood at Rs 528.16 crore accounting for 5.02 % of educational loan business on June 30, 2011. There is no security required for educational loans up to Rs 4.00 lakh. Educational loans in India normally range between Rs 4 lakh and Rs 45 lakh with the repayment period being seven to 10 years. "Many students from North India pursuing engineering degrees in Tamil Nadu don't have a permanet address and it becomes difficult to track them once they complete the course" said S.N.Mishra , the convenor of State level Bankers ' Committee (SLBC) in Tamil Nadu.
There is no mechanism in the banking sector to ensure proper implementation of a scheme as usual in our delivery system. Educational loan scheme is no exception!
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