Students of the state have a lot to cheer. The state government’s decision to provide education loans for families with annual income up to 6 lacs at interest rates of a mere 1 per cent per annum is laudable. This annual income bracket implies coverage of great many students because this figure will cover a huge chunk of the middle class. Chief Minister Naveen Patnaik has said that he understands “the financial stress parents, especially of the poor and middle class, undergo” in meeting the costs of education of their children.
The government’s decision on the loans is evidence of that and comes as a relief for thousands of students and their parents. The thought that this step will reduce the loan burden of parents and financially empower poor students to pursue their aspirations in higher education cannot be faulted. Interestingly, it may be noticed that this is probably the first time that the Naveen Patnaik government is paying heed to the middle class Oriya. A huge chunk of the population of the state had been feeling neglected and were unhappy with the present administration.
Excessive sops to the poor and all that focused in the Re.1 rice had deprived them of a labour force for their agriculture as well as small and micro enterprises. Although the poor have been retained as a strong voter base for the Biju Janata Dal, the addition to this of the middle class could open up new vistas for the party in the future. Critiques may claim this as vote bank politics. However, the positive side is so immense that finding faults is difficult. This loan for higher education can be considered as a great favour to parents who have managed to impart high school level education for their children with their own resources. Most middle class families face a severe financial crunch while trying to support specialized higher education such as medical or engineering for their kids.
Not everyone has access to education and fewer still have access to quality education. This is mostly because quality education that is imparted by the highly acclaimed institutions is very expensive, largely as a result of the crass commercialisation of education. The extent of this commercialisation can be gauged from the fact that private institutions that impart supposedly quality education charge a lot as tuition fees on top of other charges such as hidden capitation, hostel and study material, as well as fees for the use of library and the laboratories. This easily comes in the10-25 lacs range a year for courses in engineering or medicine. Just the capitation fees could be as much as Rs15 lacs, in addition to other fees. Even the top government institutions charge huge amounts as fees. The Indian Institutes of Management have decided to more than double their tuition fees from Rs90,000 to Rs2 lacs per year. The National Institutes of Technology are also all set to hike their tuition fees from Rs70,000 to Rs1.25 lacs per year.
Most parents would find it difficult to bear such fees, with those from the middle-income groups getting hit the hardest. Money proves to be a barrier for these parents and deprives their children of quality education which results in offering them a bleak future.
However, it must be acknowledged that availing such a loan may prove to be a Herculean task for an average middle income family which cannot offer fixed assets of great value as collateral. The general impression that collateral is not sought for in an education loan is incorrect. The puny bank manager at a small branch generally manages to play havoc with students and delays timely disbursal of loan which, in turn, time bars the student from getting admission. Keeping this as a backdrop, the government cannot sit smug thinking the declaration will yield results.
There is every possibility that nationalized banks under the aegis of the federal government will not reach out that extra bit to help make this state bid a success. Therefore, the state government has to ensure that implementation is scrupulously monitored by a carrot and stick policy. Every district has crores kept in nationalized banks. Usually these funds are lying unutilised for lengthy periods. Offices of the state government such as DRDA, R&B, Rural Works and even hospitals have millions tucked away in these banks. Interestingly, at present, these amounts are deposited at the whim and fancy of individual officials. If these funds could be kept on condition in specific different banks in each district that those particular favoured financial institutions will handle the complete education loan aspect then much trouble could be avoided.
There are Lead Bank Managers in each district. They are supposed to coordinate between district administration and the banks operating in that area. These bank officials could be asked to ensure smooth and timely disbursal of education loans. Here, it must be noted that all banks require tremendous protection and support from the district administration. Therefore, a quid pro quo would not be impossible to work out with these nationalized banks. Apart from this, the state government can aid and encourage Cooperative banks, Urban banks and Gramya banks to also pitch in in this effort.
There are many suggestions in this regard about which the state government is probably very aware. Furthermore, every district should have a screening and vetting committee comprising bureaucrats, educationists, people’s representatives, business and social workers who should be responsible to ensure that the right students are chosen and timely loans are granted.
