Education loans down in East Godavari

Kakinada: Student loans, which are more or less the lifeline for students to pursue higher education at home and abroad, are not only beyond the reach of the common man, but their numbers are also shrinking. in the district of East Godavari. Although banks disbursed educational loans worth Rs 48 crore to 620 students across districts in fiscal year 2016-17, the number is a quarter of what it was three years ago. .

Financial experts cite two reasons for the sharp drop in the number of borrowers. State government reimbursement of fees and banks’ insistence on collateral, despite guidelines to the contrary, are the stumbling blocks, they say.

Education loans in the district have increased over the past decade thanks to initiatives taken by then district collector Mr. Subramaniyam. From what was previously a meager loan of Rs 3.50 crore with 150 applicants, loans hit Rs 200 crore, only to decline sharply.

Speaking to The Hans India, S District Main Bank Manager Jagannadha Swamy said bankers believe government fee reimbursement has significantly reduced the number of loan seekers.

“In December 2015, there was an unpaid debt of Rs 455 crore concerning 1,450 beneficiaries. Students apply for loans to study abroad and there are cases where they provided a forged address, ”he added.

Dr Paruchuri Krishna Rao, President of Pragati Educational Institutions, said that although the fee reimbursement covers 50% of tuition fees, the reluctance of bankers to provide unsecured loans is the main reason for the decline in lending. to education.

“Unless the collateral guarantee is shelled, the banks are not showing up to provide education loans,” he added.

L Anjaneyulu

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