HRD minister Kapil Sibal and Planning Commission deputy chairperson Montek Singh Ahluwalia have been involved in a public spat over the model to ensure that every student gets loans for pursuing higher education.
Sibal wanted the government to ensure that financial institutions granted loans, a view that was rejected by Ahluwalia. They were present at the launch of a report on corporate sector participation in higher education by Infosys founder NR Narayana Murthy.
On Tuesday, the squabble started with Sibal saying that education reforms cannot be pursued without government funding. He expressed his annoyance with the Planning Commission for rejecting the HRD ministry’s proposal for setting up a Student Loan Finance Corporation.
“One should ask the Planning Commission why our proposal for the finance corporation was rejected?” he asked in a pointed question to Ahluwalia in the packed house. “Some loans have to be guaranteed by the government, or no financial institution will grant money for student upliftment,” Sibal said.
Many banks, including those from the public sector, have imposed stringent conditions on awarding student loans. “Bright students from a poor background are the worst sufferers,” an official said.
Ahluwalia hit back minutes later by saying that budgeted support for education loans is a “bad idea”. The noted economist made it clear that the education loan scheme has to be based on payback methodology, depending on the job the loanee gets.
“If a student gets a government job, half of the loan amount can be waived off, but if he or she gets employed in the lucrative private sector, the entire loan should be repaid,” he told HT.