According to the data collected by RBI, the growth in education loans fell to 6.6 per cent in November 2014 from 8.3 per cent in the corresponding month of 2013. Despite this report there are a significant number of students are still approaching banks to take loans to pursue their education. While the number is going to keep changing in the years to come, the students who hope to take loans to pursue their studies and live their dreams hope that the Central Government grants them some relief or relaxation. Following are four things that the students are expecting from the upcoming budget by the central government.
Affordable Student Loans
The student loans in India come with a crucial requirement of collateral or guarantor which not every student can afford. For students interested in pursuing their studies in India itself, they can avail an education loan to a maximum tune of 10 lakhs. If a student's loan amount exceeds 7.5 lakhs, the student has to provide collateral for the entire loan amount in case he/she fails to pay back the loan amount. However, due to poor job conditions most students are not able to pay back their loans and hence are in jeopardy. The same condition is found with the students who hope to pursue their studies abroad. Consequently, the students are expecting the central government to create a credit guarantee fund for students, which will ensure a 100 percent guarantee to the creditor banks.
Lower interest on Student Loans
When most students and their parents approach a bank to apply for a loan it is because they have a long relationship with the same and trust it implicitly. However, the majority fail to compare the interest rates on the loan schemes provided by other banks which maybe far lesser. While it is important to apply for a loan with a bank that is trusted, a key criteria a student must look out for is the interest rates. The students hope that the government in its upcoming budget will lower the interest rates on the student loans which will allow the students to pay back the loan amount faster and hence lessen the burden on them and their families.
Raising the Moratorium Period of Loans
The moratorium period of loans had been a blessing to students as it provided them a period of 1 year after the completion of the course or 6 months after getting a job to repay the loan amount which they have taken from the bank. However, in recent years, there has been a change in the job scenario, with very few jobs being available in the market or the pay provided by the jobs is very less. It has become increasingly difficult for students to acquire jobs which provide a decent pay with which they can repay the loan amount and therefore the moratorium period should be raised by 6 months to a year.
New Job Opportunities
Over the past few years, the job market in India has been in a relatively bad state. As there have not been any favorable job prospects, students are continuing to gain more and more degrees. However, this scenario will further make the students overqualified and unemployable and therefore decrease their chances to get any job. In order to decrease the unemployment rate which has risen over 20 percent among the youth, the government must increase the number of appropriate job opportunities in the present market.