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Are students belonging to the general category walking away with the chunk of education loan subsidy meant for economically weaker sections?
According to data presented by the Finance Ministry in the Lok Sabha, students belonging to the general category got up to 60 per cent of the interest subsidy under the Central Sector Interest Subsidy Scheme (CSIS) during the five years from 2015-16 to 2019-20, while the share of students belonging to Scheduled Class (SC) and Scheduled Tribes (ST) was as low as one per cent during one of the five years.
According to the data, students belonging to the general category had a share of nearly 45 per cent in the total subsidy amount during 2015-16 and this rose to 54.77 per cent, 56.76 per cent and 59.32 per cent during 2016-17, 2017-18 and 2018-19, respectively. This category has a share of nearly 57 per cent as on date this fiscal.
At the same time, the share of students belonging to OBC (other backward categories) rose from 28.78 per cent in 2015-16 to 35.91 per cent in 2016-17, 37.59 per cent in 2017-18 and 39.54 per cent in 2018-19; it is 39.27 per cent so far this fiscal.
However, the share of SC students was 23.91 per cent in 2015-16 and this dropped to 7.18 per cent, 4.56 per cent and 0.93 per cent during the next four years, according to the data. It has risen to 3.04 per cent this fiscal. The share of ST students saw the same trend during the five-year period, moving from 2.28 per cent to 2.13 per cent, 1.07 per cent, 0.19 per cent and now 0.65 per cent. The CSIS was launched by the Ministry of Human Resource Development in 2009 and modified last year. Students belonging to economically weaker sections, whose annual gross parental/family income is up to ₹4.5 lakh are eligible for the scheme. It provides full interest subsidy during the moratorium period on education loans without any collateral or third-party guarantee for pursuing technical/professional courses in India. There is no reservation under the scheme.
The moratorium period means the course period plus one year and during this period the interest is borne by the Centre. After the moratorium period, the interest on the outstanding loan amount needs to be paid by the student, in accordance with the provisions of the existing educational loan schemes of banks and as may be amended from time to time.
Bank officials say that they do not differentiate among students on the basis of category in sanctioning and disbursing education loans; the higher share of general and OBC category in interest subsidy is a mere co-incidence, they claim. However, academicians working on Dalit issues have a different take.
Key reasons
Rajesh Paswan, Associate Professor at Jawaharlal Nehru University, lists two reasons for the very low share of SC and ST students in the subsidy scheme. He alleges that normally banks have a negative bias in sanctioning loans to the SC/ST category and the same holds true for education loans. “If the number of loans sanctioned/disbursed is low, the amount of subsidy for a particular section will also be low,” he says.
The second reason, he says, is that the number of students belonging to SC and ST categories getting enrolled for technical education is low. “Also continuous harassment by bank officials and demand for collateral even for small-ticket loans discourage students from going for a loan.”
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