More students took education loans from banks in the financial year 2011-2012, compared to the preceding fiscal year. Yet, the amount disbursed by banks towards student loans fell substantially.
In 2011-12, 8.6 lakh students took loans compared to 8.1 lakh in the previous financial year. However, total money given out as student loans fell from Rs. 11,200.53 crore to Rs. 8103.06 crore in the same period, according to data compiled by the Indian Banks’ Association (IBA) from 26 public sector and 24 private sector banks.
“One reason could be that more loans were given for vocational courses, which are cheaper [as compared to professional courses] and less risky for banks because students will be able to repay faster as these courses are shorter and lead to employment quickly,” said Harsh Roongta, CEO, ApnaPaisa.com, an online financial company.
The data shows that the number of students who borrowed more than Rs. 7.5 lakh went up in the last financial year. Fewer students took loans ranging between Rs4 lakh and Rs. 7.5 lakh. Also, though more students sought loans of less than Rs. 4 lakh, the amount disbursed in this category fell by Rs. 3,172 crore.