: R. Bharathi, a first-generation learner, scored 1089/1200 in his Class XII exam and made it through the engineering counselling to a city college last year. But he could not afford the initial deposit demanded by the college and had to forgo the seat.
“Last year, after deducting the Rs.20,000 scholarship available for first-generation learners, I was asked to pay around 80,000 in one instalment. I hope this year I can avail myself of a loan or seek the support of NGOs to fund my education,” says Bharathi, a vocational stream student who has got a seat in Sri Venkateswara College of Engineering.
There are many other students like him. R. Narendran and S. Arjun are waiting for their turn in counselling in the hope that education loans offered by the banks will fund their college education. “I have scored 1132. I approached the bank to fund my education, and they have said that after I get the fee quotation from the college, I can apply for the loan,” says S. Arjun.
To assist students who wish to pursue higher education, banks are providing loans for students up to Rs.4 lakh without demanding any security. Banks insist on a third-party guarantee from a reliable person for disbursing the loan. An interest subsidy of six per cent is available on loans for students who hail from families with an income below Rs.4.5 lakh per annum. Another benefit available for girl students is a concession of 0.5 per cent in the interest rates.
“Students can obtain the loan without difficulty. As per rules, students with arrears cannot be denied the loan instalment in the second year,” says a bank official.
But students face some obstacles in taking the loan. For colleges under the Anna University, July 25 has been announced as the last date for payment of fee and for self-financing colleges, it is July 29.
The delay in processing loans by banks might require that the student has to pay the first-year deposit on his own. “I am not sure how my parents can pay the huge amount the college might ask for, unless I receive the loan amount immediately,” says Narendran.
But D.Sherin, coordinator, Velicham, an NGO, cites instances of students with backlogs being denied loans in the second or third year of education. “As a result of this, some students are forced to discontinue the course. The managers are held responsible for the loan, and many students have been denied loan as the managers do not want to take a risk,” she says.
“Education is a State responsibility whereas loans are under the control of the Central government. That causes disparities while disbursing the loans,” adds Sherin.
Students are given up to six months after the competition of the course or once they get a job, whichever comes early, to start repaying the loan. Banks come across many student defaulters who finish their course and move to a new location without any contact details. “This is the reason many managers lose faith and are forced to deny some students loans in the future,” says the manager of a city bank.


  • Delay in processing loans might require that student has to pay first-year deposit on his own




  • Students are given up to six months to start repaying the loan