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While the average middle-class Indian parent is financially prepared and has planned well for the education expense of his children (fee charged by professional colleges), he is caught unawares when it comes to exorbitant fee of coaching centres or tutorials that prepare these students for professional careers.
Sensing an opportunity here, Corporation Bank is planning to launch a new loan offering for students enrolling for coaching classes for entry into premier technology and business schools.
Loan amount
The loan amount would be between Rs 50,000 and Rs 2 lakh at an interest rate of 11 per cent. The tenor would be for two years and the loan amount would be recovered from parents, because most students would still be minors when they take up the coaching course, Mr Ramnath Pradeep, Chairman and Managing Director, Corporation Bank, told Business Line .
The bank would tie up with established tutorials for the same and is in the process of identifying partners, he added.
“Though all students might not succeed in securing a seat in a professional course, affordability should not be a constraint for getting an admission to these classes.”
Criteria
On criteria for sanctioning loans, Mr Pradeep said that they would base this on the tutorial's reputation and its (tutorial's) selection procedure of students.
The fee for preparing an average student for entry into a medical school or a technology institute such as IIT is anywhere between Rs 50,000 and Rs 1.5 lakh.
Towns such as Kota and Hyderabad have reputed coaching centres that charge high fees and students would need loans for such programmes, said Mr Dipanjan Das, Senior Vice-President, Career Launcher, education services company. He added that fees for MBA entrance coaching programmes are still reasonable (Rs 28,000-35,000) and students may not need loans for these.
Mr Ajay Arora, Director of T.I.M.E. – Bangalore (coaching centre for competitive exams), welcomed this initiative by Corporation Bank.
“This is good news for students and we would like to partner with the bank to help them reach out to students.”
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