A

Executive Summary on

Analytical Study of Higher Education Loan

Extended by the Banks in Nagpur City for

Schedule Case and Schedule Tribe

Sudents

Praposal

For

Minor Research Project (UGC)File No. 23-2866/11(WRO) Dated 25/01/2012

Principal Investigator

Dr. Pradeep D. Hadke

Dhanwate National CollegeCongress Nagar, Nagpur

(Affilated to Rashtrasant Tukdoji Maharaj Nagpur, University,

Nagpur)

Nagpur-440012(M.S. )

During 11th century that the Muslims established elementary and secondary

schools. This led to the forming of few universities too at cities like Delhi, Lucknow

and Allahabad. Medieval period saw excellent interaction between Indian and Islamic

traditions in all fields of knowledge like theology, religion, philosophy, fine arts,

painting, architecture, mathematics, medicine and astronomy.

Nagpur is located at the center of the map of India. It possesses mythological,

historical, political, social and industrial background. The geographical area of this

city is 2 17.56 sq.km. This city is situated 3 12.42m. high from the sea level and in

Nagpur about 3156.25 hectors of land is under agriculture.

Nagpur is a major education centre in Central India. College of Agriculture,

Nagpur is the oldest college in the country founded in 1906 by the then British

Government. The college is held at the historic and heritage Victoria Building (built

in 1856 for stay of Queen of England Her Highness Victoria at Nagpur) at

Maharajbagh, Nagpur. The population of Vidarbha region is 2,30,03,179 and as per

the previous census report from 2001 (2,06,30,987) the population of Vidarbha has

swelled up by 23,72,192 in a decade.

India's higher education system is largest in terms of number of

institutions and third largest in terms of enrollment next only to China and United

States. Total approximate number of institutions imparting higher education in India

is 26,000 whereas it stands at 6,706 in USA and 4,000 in China. Student enrollment in

higher education in India is 13.6 million, next to China (25.35 million) and USA

(17.76 million) (Ernst & Young, 2010).

Over the years, considerable progress has been made in higher education in

the country. In the Xlth Plan, India moved from an "elite" system of higher education

to a "mass" system when the Gross Enrolment Ratio (GER) crossed the threshold of

15%. However, our GER at 18.8%8 still remains below the world average of 29% (as

of 2010).

The NEP 1986 and POA 1992, state that, "the new policy will lay special

emphasis on the removal of disparities and to equalize educational opportunity by

attending to the specific needs of those who have been denied equality so far". The

objectives specified in the NEP are in the best interests of a democratic society and

for the first time "equality" is prioritized over other things. The policy statement seeks

to remove inequalities based on gender, race, religion, region or cast4ogether with an

improvement of quality.

Higher education is of vital importance for the country, as it is a

powerful tool for building a knowledge-based twenty-first-century society. The Indian

higher education system is one of the largest in the world.

A large-scale expansion in university education has been initiated during

the Eleventh Five Year Plan by setting up new educational institutions comprising 30

central universities, 8 new Indian Institutes of Technology (NTs), 8 new Indian

Institutes of Management (IIMs), 10 new National Institutes of Technology (NITs),

20 new Indian Institutes of information Technology (IIITs), 3 new Indian Institutes of

Science education and Research (IISERs), 2 new Schools of Planning and

Architecture (SPAs), 374 model colleges, and 1000 polytechnics.

One of the major concerns of the Government is to ensure that nobody is

denied Professional education because he or she is poor. The Indian Banks'

Association (IBA) had formulated a comprehensive model educational loan scheme

for adoption by all Banks aimed at providing financial support from the banking

system to deserving/meritorious students for pursuing higher education in India and

abroad.

The Government of India has now approved a scheme to provide full interest

subsidy during the period of moratorium i.e., Course Period plus one year or six

months after getting job, whichever is earlier, on loans taken by students belonging to

Economically Weaker Sections from scheduled banks under the Educational Loan

scheme of the Indian Banks' Association, for pursuing any of the approved courses of

studies in technical and professional streams, from recognised institutions in India.

The nomenclature of the Scheme would be " Central Scheme to provide Interest

Subsidy (CSIS) for the period of moratorium on Educational Loans taken by students

from Economically Weaker Sections from scheduled banks under the Educational

Loan Scheme of the Indian Banks' Association to pursue Technical/Professional

Education studies in India".

Education is central to the Human Resources Development and empowerment in any

country. National and State level policies are framed to ensure that this basic need of

the population is met through appropriate public -and private sector initiatives. While

government endeavors to provide primary education to all on a universal basis, higher

education is progressively moving f into the domain of private sector. With a gradual

reduction in government subsidies higher education is getting more and more costly

and hence the need for institutional funding in this area.

The scope of education has widened both in India and abroad covering new

courses in diversified areas. Development of human capital is a national priority and it

should be the endeavor of all that no deserving student is denied opportunity to pursue

higher education for want of financial support. Loans for education should be seen as

an investment for economic development and prosperity. Knowledge and information

would be the driving force for economic growth in the coming years.

Based on recommendations made by a Study Group, IBA had prepared a Model

Educational Loan Scheme in the year 2001 which was advised to banks for

implementations by Reserve Bank of India vide circular No.

RPCD.PLNFS.BC.NO.83/06.12.05/2000-01 dated April 28, 2001 along with certain

modifications suggested by the Government of India. In line with the announcement

made by the Hon'ble Finance Minister in his Budget Speech for the year 2004-05,

IBA had communicated certain changes in the security norms applicable to

educational loans with limits above Rs.4 lakhs and up to Rs. 7.5 lakhs.

Till some years back higher education and quality education was not

affordable to some illustrious students because of the financial constraints. There was

no any alternative but to jump in the job market prematurely. And this led to untimely

end of budding talents and their forceful transformation into to the mediocrity.

Scholarships were there, but those were so less in numbers that only luckier

few could avail them. But now the scene has changed drastically. The boom in the

banking sector has led to release of large amount of funds for education loans. Now,

education loans are easily available from various banks in India and this change is

encouraging more and more students to take up higher education despite their

financial shortcomings.

As the problem pertains to the huge sector of bank and students opting for loan, the

regulatory framework as applicable to India, the services offered and the threat of

security and integrity of data come under the purview of the study.

As there are vast number of public sector and private sector banks and huge

number of students opting for education loan are spread vicinity of Nagpur; the

researcher is studying the significance of education loan in 21 banks as per stratified

sampling method using convenient subclass methodology that are 21 public sector

banks. The students opted for education loan under study are 50 in number sampled

randomly from various colleges. The major attention is paid to the education loan

extended by the banks both in amount and in numbers.

The universe for the research is too vast and covers geographical

boundaries of Nagpur city. The selection of the sample becomes a cumbersome task.

This sample is considered as the true representative of banking and end users in

general. While selecting sample, care has also been taken that respondents of both

genders and different level of education courses, should have appropriate

representation.

The researcher has used scientific method, i.e. combination of primary and

secondary method of data collection. "A branch of knowledge can be called science

only under condition that it can be studied through scientific method."

Further Research Data Analysis and Conclusion have been included in

the concern chapter in the study. The conclusions drawn in this study are based on a

very random sample and may or may not be applicable at large to universe in the

same sense and in the same context. Researcher has given the Recommendation for

the policy implementation level.