MHRD data also indicates variation in the size of disbursed loans, with CBOs, SCs and STs receiving lower amounts on average.
About 70% of disbursed student loans in the country appear to go to upper-caste students, data from a government-funded student loan bonding program provided by the Department of Human Resources Development showed ( MHRD) of the Lok Sabha.
The data provided was for the Credit Guarantee Fund for Education Loans (CGFSEL) program, through which banks can vouch for the National Credit Guarantee Trustee Company Limited (NCGTC) for loans sanctioned up to ₹ 7.5 lakh without any warranty.
The data available from the 2016-17 financial year so far shows that of the 4.1 lakh students benefiting from the program, 67% were in the general category (GC). Only 23% belonged to the other backward classes (OBC), 7% to the listed castes (SC) and 3% to the listed tribes (ST).
It is important to note that the sanctioned loan amount for GC students tends to be higher than the sanctioned amount for students of other categories.
For example, while 67% of the students were in the general category, they received 70% of the total loan amount of 13,797 crore covered by CGFSEL.
Average loan amount
The average loan amount guaranteed under the program for a GC student was around 3.54 lakh. In contrast, for students in other categories, the height for OBC, SC and ST students respectively was ₹ 2.91 lakh, ₹ 3.24 lakh and ₹ 3.17 lakh.
Su. Venkatesan, MP for Madurai, who obtained the data via a question in the Lok Sabha, said that although data on all education loan disbursements is difficult to obtain, data on the CGFSEL program can be viewed. as a fair indicator.
Stressing that the program only covered small loans sanctioned without collateral, he said: “These are the loans that benefit those in socio-economically backward sections. If there is such a huge gap here, it clearly indicates a problem from a social justice perspective. The NCGTC’s annual report for 2017-18 shows that 29 banks have signed up for the program.
Large private sector banks were not on the list and all public sector banks were present. The report also said that 83% of the loans covered were smaller in size, i.e. less than 4 lakh.
Mr Raj Kumar, a former banker from Namakkal, who heads the Education Loan Awareness Movement, said the data clearly showed that education loans were mainly available to students from better-aware families who were could access banks through their social networks because of their caste and class privileges.
K. Srinivasan, Moderator, Student Loan Working Group, said bias towards students in a particular category can only be clearly established if details of all student loan disbursements were available, but there was no doubt that students from underprivileged sections found it difficult to obtain loans.
“The loans should be made to all eligible students, regardless of their caste. Unfortunately, unlike the previous regime, education loans are not a priority for the current central government, ”he said.