Although the education system in India has improved from all aspects, it still faces a lot of drawbacks which is refusing the total educational world to get more developed. Huge amount of competition and overflowing demand from the increasing population for good educational institutes have forced many private colleges and schools to set up. But education in private colleges or schools is a luxury.
Colleges and other private institutions take up the advantage of the failure of the Indian government to satisfy the growing competition. Students after completing higher secondary or intermediate courses join these private colleges in search of better education. These students then face the hungry faces for the huge amount of admission and tuition money.
But most of the common people fail to give the huge amount as the fees for the courses. Thus, even after having interest and talent to pursue higher studies, students belonging to families of low income, gets deprived due to excessive fees. Fortunately. A year ago, finance minister of India permitted the banks to provide help to these interested students through education loans. Education loans were only meant for eligible students will have the potential to succeed in life with a good job and repay back the loans.
Recent studies say that the banks are really going slower in case of offering education loans to the students. The main reason is that some students fail to repay back the total loan and elope from their original address. The banks fail to chase their address and thus the lenders get cheated. Past one year, according to recent observations, the rate of these defaulters has been increasing at a huge rate.
Educational loans are mostly taken by the students joining medical, engineering or management courses. Lack of good jobs makes most of the fresh graduates go defaulter if they are within the debt of education loans.
If the Student takes up the education loan of approximate 4 lakhs, the banks charge interest upon it and finally the net amount reaches up to a minimum of 7 lakhs. Interest rates range between 11% to 13% which depends on the bank and the course for which it is required. Failure of getting a good job truly makes a huge burden while repaying back of 7 lakhs.
A major reason for the students of becoming a defaulter is the uneven distribution of Indian economy. Students from middle-class families with medium incomes cannot repay the loans if they do not good employment. Even if they wish to pay back the total loan, but their financial conditions do not help them to do so. These students ultimately become the defaulters.
An interview with the business head of Evans Financial Service, Neeraj Saxena, says that India expenses huge amount of money for the betterment of the education system of India. But the government fails to put this money wisely and the finance gets decreased than the investment simultaneously. There are also private investors and big companies who give education loans. But due to the growth of defaulters, the banks and credit dealers goes back while investing.