The accessibility of education loans in India is shrinking amid the rising higher education cost, as per the findings by a Parliamentary panel. The Parliamentary Panel headed by Congress MP Digvijaya Singh observed that there was decline in active student loan accounts which fell from 23.36 lakh in 2014 to 20.63 lakh in 2025. Meanwhile, during the same period, the credit amount surged to Rs 1,37,474 crore from Rs 52,327 crore. “The Committee expresses its concerns over these figures since it suggests that the accessibility of educational loans is declining over time, even as educational costs have risen rapidly," the panel observed.
The committee observed that the majority of students hailing from disadvantaged and remote areas were not aware of the government's schemes for education loans, despite several initiatives for publicity of the PM Vidyalaxmi scheme. Under the PM Vidyalaxmi scheme, the total number of education loan applications received was 55,887, and the amount sanctioned was Rs 4,427 crore.
“The states of Tamil Nadu, Kerala and Maharashtra account for the bulk of education loan borrowers. This skewed distribution of loan disbursal shows that there are gaps in implementation of the education loan schemes and there is a dire need to make efforts to raise awareness across States,” it said.
The panel noted that students in northern and rural regions remain largely cut off. "Even though schemes promise collateral-free, low-interest access, in practice, banks still rely heavily on formalities. Loan applications are accepted only on proper documentation and the presence of a co-applicant or guarantor. Due diligence is carried out before loan sanction,” it said.
However, as per the panel, the number of education loans sanctioned for the period was 30,442, the number of loans disbursed was 21,967, and the total money disbursed was only Rs 688.27 crore. The figure is around merely 15 per cent of the sanctioned amount of Rs 4,427 crore under the PM Vidyalaxmi scheme, it said.
- With PTI inputs.
