Student Loans in Financing Higher Education in India
Confronted with declining public budgets for education on the one hand, and the need for more resources on the other, many developing countries such as India, have been examining alternative methods of financing higher education. One such mechanism is student loans. A student loan programme is not a new phenomenon in India. The National Loans Scholarship Scheme has been in operation since 1963. This chapter critically reviews the experience of implementation of the National Loan Scholarship scheme. It examines strengths and weaknesses and problems specific to this programme in India, with a view to identifying measures for improvement in the scheme.
KeywordsEducational loans National Loan Scholarship Scheme Repayment Recovery Rate of interest Mortgage
The author is grateful to the officials of the Department of Education, Ministry of Human Resource Development, Government of India, particularly Mr. Karamchand and his colleagues for the discussions and the material provided that were highly useful in the preparation of this article. N.V. Varghese read earlier drafts and offered helpful comments. Thanks are also due to the participants of the IIEP Educational Forum on Student Loans in Asia (held in Genting Highlands, Malaysia, November 1990), Maureen Woodhall and others for their comments. The views expressed here are the sole responsibility of the author.
The statistics presented in the paper are drawn from annual publications, viz., Annual Report(s) and Education in India, both published by the Department (or Ministry) of Education, Government of India, New Delhi, unless otherwise stated.
- Finance Commission. 1973. Report of the Finance Commission (Sixth). New Delhi: Government of India.Google Scholar
- Hansen, J. 1989. Cost-Sharing in Higher Education: The United States Experience. In Financial Support for Students: Grants, Loans or Graduate Tax? ed. M. Woodhall, The Bedford Way Series, 45–66. London: Kogan Page.Google Scholar
- Kulshrestha, D.K. 1990. Recovery Problem of Bank Advances. Yojana (16–31 July): 17–19.Google Scholar
- Ministry (or Department) of Education (various years). Annual Report. New Delhi: Government of India.Google Scholar
- Ministry (or Department) of Education (various years). Education in India. New Delhi: Government of India.Google Scholar
- Ministry of Finance. 1990. Economic Survey 1989–1990. New Delhi: Government of India.Google Scholar
- Psacharopoulos, George, and M. Woodhall. 1985. Education for Development: An Analysis of Investment Choices. New York: Oxford University Press for the World Bank.Google Scholar
- Tilak, Jandhyala B.G. 1987. Economics of Inequality in Education. New Delhi: Sage Publications for the Institute of Economic Growth.Google Scholar
- Tilak, J.B.G. 1989. Education and Its Relation to Economic Growth, Poverty, and Income Distribution: Past Evidence and Further Analysis. Discussion Paper No. 46. Washington, DC: World Bank.Google Scholar
- Tilak, J.B.G. 1990. The Political Economy of Education in India. Special Studies in Comparative Education No. 24. Buffalo: State University of New York at Buffalo, in collaboration with the University of Virginia.Google Scholar
- Tilak, J.B.G. 1992. Public and Private Sectors in Education in India. In Emerging Issues in Education: Comparative Perspectives, ed. R.F. Arnove, P.G. Altbach, and G.P. Kelly. (pp. 173–185; 331–334). Buffalo: State University of New York Press.Google Scholar
- Tilak, J.B.G. 1993. Financing Higher Education. In Higher Education Reforms in India: Experience and Perspectives, ed. S. Chitnis and P.G. Altbach, 41–83. New Delhi: Sage.Google Scholar
- Tilak, J.B.G., and N.V. Varghese. 1985. Discriminatory Pricing in Education. Occasional Paper No. 8. New Delhi: National Institute of Educational Planning and Administration.Google Scholar
- Woodhall, M. 1987. Lending for Learning: Designing A Student Loan Programme for Developing Countries. London: Commonwealth Secretariat.Google Scholar
- Woodhall, M. 1989. Loans for Learning: The Loans Versus Grants Debate in International Perspective. Higher Education Quarterly 43 (I) Winter: 76–87. Google Scholar
- World Bank. 1986. Financing Education in Developing Countries: An Exploration of Policy Options. Washington, DC: The World Bank.Google Scholar