Edu loans becoming must for securing admission

Mumbai: In the rush of securing admissions, students nowadays tend to rely more on educational loans from banking and non-banking sectors. As per recent trends, youngsters prefer educational loans for purposes including paying coaching class fees, pursuing MBA in private management colleges, and medical and engineering courses. So much so that experts feel loans are becoming a must for middle-class students as the average fee of engineering coaching classes is between Rs 80,000 and Rs 1.5 lakh.

According to Crif High Mark, a RBI-approved credit bureau, 90 per cent of education loans are from public-sector banks by value and volume while 20 per cent of loans are in the Rs 4 to Rs 10 lakh bracket. According to a survey conducted by the World Bank, India as a hub for higher education ranks third after the US and China.

“India is evolving into a knowledge-based economy, where human capital with specialised skills is its major strength. With the increasing need for qualified professionals, higher education has now become a necessity,” said Amit Gainda, CEO, Avanse Financial Services.

“An increasing number of students is seeing the potential of pursuing specialised and new-age courses and is opting for these unconventional courses in India and abroad. However, not many financial institutions/banks offer finance for these courses. But we do,” he said.

Rajalakshmi Shivbalan, a senior professor who has been a teacher in the engineering field for the past decade, said, “Engineering is a life-changing sector. A student either wins or changes the field. Apart from having the confidence to pursue and complete it, financial stability is a must, either way. More than the student, the parent/guardian knows how much it is going to cost them (financially).”

Going to a coaching class is the student’s decision as he or she is already paying nearly Rs 1 to Rs 2 lakh to their college.