The Hindu Business Line : Education loans

The article “Education loans: Needed, a fresh, sustainable model” (Business Line, May 23) is highly relevant at this point of time when banks are facing increasing NPAs in this sector.

In this context, it may be mentioned that the Finance Minister, during a speech at a bank branch opening, stated that more and more students should have access to education, also mentioning scholarships available to them through the Government.

By trying to introduce a counter-guarantee scheme, the Government actually targets students from the strata that deserves higher education but cannot afford it. This is a welcome measure as far as banks are concerned.

The writer’s suggestion for enabling repayment is very much precise.

Marking a lien, or details of financial obligation, by educational institutions will indicate the responsibility of the prospective employer to enable repayment of the bank loan.

Not all employers may be willing to shoulder this responsibility.

This will have another purpose too.

This will also indicate the existing liability of the person towards the Bank, at the time of verification of certificates for purpose other than employment.

One should infer that these are not hard steps but only indicate that it is highly essential to be responsible.

Finally, with so much of ambiguity that banks face while dealing with type of institutions and courses eligible for education loan, the education loan scheme should have common features for all Banks to enable speedy sanction of loans.

Balakrishnan N. e-mail

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