Only 3% Young Students Avail Of Education Loan In India
Less than 3% students, mostly belonging to middle income families in India avail of education loans against 85% in UK, 77% US and 70% in Germany and France, according to the Study by ASSOCHAM.
The study highlights, that though there are many schemes for providing financial aid to poor students, the amount given is awfully low and procedure to get are very cumbersome and that is why the percentage for education loan seekers is extremely low.
According to Study, US spends nearly $ USD 80 billion on higher education annually mostly in the form of students aid, India has allocated about $ 3.5 million USD for its flagship merit-cum-means scholarship schemes.
The study also says that the number of engineering graduates in India is 3,50,000 annually, compared to 70,000 engineering graduates in US and 100,000 engineering graduates in Europe. India also produces 60,000 MBAs every year.
Engineering colleges in the country have been growing at 2% a year while business schools have grown at 60% annually – with 348 universities and over 17,973 colleges spread across the country. In the year 2005, more than 2 million graduates were added that included 25,000 doctors and 6 lakhs science graduates and postgraudates. The scenario was almost similar in 2006 also but the number of students that sought loan from various financial institutions, their percentage was less than 3%.
The study also highlights that Singapore and Malaysia attracts high quality higher education institutions from many advanced countries which augment their domestic capacity of quality higher education serving their own citizens.
Singapore and Malaysia have the presence of about 1 lakh foreign students against 1,40,000 foreign students in China. The number of foreign students is continue to be in the range of less than 20,000.
The Study has projected that by 2012, India will contribute an additional 44 million to the global labour pool. During this time, the US workforce will expand by 10 million.
The ASSOCHAM Study also claims that higher education in India has expanded rapidly over the past 2 decades. This growth has been primarily driven by the private sector initiative. Public expenditure on higher education is not even 0.5% of the GNP (Gross National Produce) and it has been falling in recent year.
The study suggests that education needs additional investment of nearly Rs. 1 lakh crore to Rs.1,20,000 crore against present investment of Rs. 91,000 crore per year. The new education cess will hardly generate Rs.3,500 crore per annum and the total amount of cess collected by the government would be in the range of about 10,500 crore. This includes the cess amount of 7000 crore per annum @ 2% imposed couple of years ago. A 1% additional cess was imposed in the Finance Act of 2006-07.
The amount collected through cess as per findings of Study should be utilised for spread of primary and partly secondary education and there should be specific guidelines issued to all financial institutions including banking mechanism to liberally extend education loans to meritorious candidates particularly in the professional category.
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