Pune: The present structure of education loan disbursal does not seem to be student-friendly, especially for students from a modest background. City-based medical students have been facing hurdles in applying for education loans as nationalised banks in the country put a cap on education loans to students, which becomes inadequate to meet the needs of these students.
Education loans are extended only up to the value of assets put up with banks. Many students do not have other financing to supplement their education loans, due to which many cannot take admissions to good colleges. Considering rising fees in private medical colleges, loans offered by the banks are not sufficient enough.
“Education loans are meant to ease the burden of paying large amount of fees by students. If we could pay such hefty amounts, we wouldn’t require loans. State Bank of India (SBI) offers a limited amount of loan without security. My total fee structure of my medical course comes up to Rs 32 lakh, but the bank has sanctioned Rs 7.5 lakh only. It means I get Rs 1.66 lakh per year. I have to keep an asset as security if I am to avail more, but I have nothing to mortgage. Hence, I had to accept only this much amount,” said Pratiksha Bansali, a second year student of MBBS.
Bansali said when the government is making so many efforts in promoting importance of education, they should also consider easing the education loan policy so that more students can benefit from it.
Another student Pranali Choudhary, a second year student of MBBS, said, “I needed a loan for seeking admission in a college, but the bank refused to grant a loan until I submitted a bonafide certificate from the college and the total fee structure of the course, which was possible only after I got admission. We got all these documents only after admission procedures were done. Therefore, I had to manage an amount of Rs 5.17 lakh for admission.”
“Furthermore, I required more education loan than the bank was offering for which I had to mortgage an asset. After a year of constant leg work, the bank finally sanctioned an education loan of Rs 25 lakh last month, which is applicable from this year. When I asked to reimburse the first year fees, they refused to do so. Eventually, I ended up paying the amount,” said Choudhary.
However, sources from SBI told Sakal Times that if a student is unable to mortgage any valuable asset, there is an option of a third party mortgage, wherein a relative can mortgage their property on behalf of the student. “Moreover, in special cases, the chief general manager of the state circle has the authority to enhance the education loan for students. There have been cases where the bank has offered high amount of education loans without any security. We then look at the other aspects like academic performance and verify genuine cases,” said the SBI official.