NEW DELHI: A Central scheme meant to help students pursue higher and technical education by facilitating easy education loans is going through its worst phase since its inception. For, the number of education loans given out to students under the Credit Guarantee Fund for Education Loans scheme has gone down by a third in the last three years, figures show.
As per the government data, only about 44,000 students availed the loan the current financial year, though the Union Human Resources Development ministry has set a target of offering it to nearly 3.3 lakh students per year.
The scheme launched in 2009 is meant to help students receive long-term education loans of up to Rs 7.50 lakh without banks seeking any collateral security and third-party guarantee as the government is the guarantor. Another scheme meant for students with family income of less than Rs 4.5 lakh per annum, too, is eligible for loans under the 2009 scheme.
In March 2017, the Narendra Modi government had extended the scheme till 2019-20. It had also set a target of increasing the number of education loans from 2.7 lakh every year to 3.3 lakh annually under the programme.
However, data from the Ministry of Human Resource Development shows that in these three years, the number of education loans has declined rather sharply.A senior official in the higher education department of the ministry said Rs 6,600 crore has been allocated under the scheme.
“The reason is perhaps the extreme caution being taken by banks as they are sanctioning loans for admission into only top-ranked institutions,” said the official.