A plan panel sub-committee on Student Financial Aid has recommended an easy and effective loan scheme for students irrespective of community and economic status i.e. not linking with parents’ income.
It has also suggested that the central government should provide full guarantee with a credit guarantee trust. The rate of interest should be slightly more than the yield on 10-year government securities, thus bringing it down from over 13% as charged now to about 8%. The period of repayment should be 12 years for general category and 15 years for SC, ST, OBCs and minorities.
The committee asked the government to continue to provide the block grants to educational institutions as part of its share in the total cost of education, "so as to ensure that the entire cost of education is not shifted to the students and the levels of tuition fees are reasonable".
To ease the pressure on students going for post graduate courses, it even suggested that students, particularly in professional courses like engineering, should be encouraged to work for a few years before their Master's.
"This will help them pay off whole or part of existing loan or save up some amount to pay for graduate education," the committee said.
The proposals are apart from an unprecedented number of scholarships it proposed for meritorious students.
The proposals signalling a shift in funding of higher education come at a time when there is a pressure on the educational institutions to generate more funds through fees. Recently, the IIT council has proposed to increase tuition fees by four times — from R50,000 to over R2 lakh per annum.
The committee also proposed a work-study programme — popular in western countries —to allow a student to work for 20 hours per week in labs and research projects to provide income avenues.
Though reliance on state funding has been increasing, the expenditure per student fell by 28% between 1990-91 and 2002-03.