Engineering Students Have Worst Track Record In Educational Loan Repayment; Take Maximum Loan!

Medical and engineering studies are in no way cheap, and students often rely on education loans to finish their education. However, repayment of loans is not always possible for students, due to non-availability of jobs. 

Of all the outstanding education loans estimated at the end of December, nursing and engineering students have accounted for the most of it, which is as much as 9.7%. 

Engineering Students Have Highest Amount Of Education Loans

As per the data collected by all the state-level bankers’ committees (SLBCs), more than 3.5 lakh accounts are in debt of Rs. 8,263 crores. This amount is as per the data as of December-end (third quarter of this fiscal) and has been classified as non-performing assets (NPAs) out of the total education loan. The total outstanding education loan is Rs 84,965 crore that more than 23.3 lakh accounts borrowed.

The loans to medical students is Rs 10,147 crore (11.9%), engineering students is Rs 33,316 crore (39.2%), nursing Rs 3,675 crore (4.3%), MBA Rs 9,541 crore (11.2%). Additionally, the total loan to all other streams is Rs. 28,286 crore (33.2%) combined.

Nursing, with 14%, is at the top of the list in NPAs against the outstanding loan amount, after which is 12.1% in engineering,  7.1% in MBA and 6.2% in medical, and 8.4% in other streams combined. 

Bihar And Tamil Nadu Worst Performers; Honest Payers Hurt By Defaulters

As per Doraswamy C, former convener of Andhra Pradesh SLBC, “Education is a priority lending sector, and beneficiaries must be sincere in returning the money they borrowed. But that does not happen in many cases.”

He also said that there are multiple reasons for this, including evasion and negligence. Also, honest re-payers are hurt by delayed payment in interest subsidies’ payment by the Centre and other system problems.

Bihar and Tamil Nadu are the states that are the worst performers, as per the distribution of education NPAs across the country. It also shows that the eastern and southern regions are the worst performers with 14.2%  and 11.9% of the NPAs; whereas the northern and western regions account for 3.3% and 3.9%, making them better performers. Additionally, the central and northeastern regions account for 6.1% and 6.8%.