Edu schemes abounding, but few loan seekers: Study

New Delhi, June 3: Despite several schemes launched by the government for providing educational loans, less than three per cent students, mostly belonging to middle income families, avail of such facility.

Moreover, the amount given was awfully low and the procedure to get it was very cumbersome, which detered a majority of education loan seekers from undertaking the exercise, says a study.

As against three per cent students availing such loans in India, the number of education loan seekers was 85 per cent in UK, 77 per cent in US and 70 per cent in Germany and France, according to the study.

The US spends nearly 80 billion US dollars on higher education annually, mostly in the form of students aid, while India has allocated about 3.5 million US Dollars for its flagship merit-cum-means scholarship schemes.

The study, conducted by ASSOCHAM, also highlights that Singapore and Malaysia attract high quality higher education institutions from many advanced countries which augment their domestic capacity.

It also claims that higher education in India had expanded rapidly over the past two decades, primarily due to the private sector initiative, whereas the public expenditure on higher education was not even 0.5 per cent of the GNP (Gross National Produce) and it had been falling in recent years.

The study suggests that education needs additional investment of nearly Rs one lakh crore to Rs1,20,000 crore against present investment of Rs 91,000 crore per year.

The new education cess will hardly generate Rs 3,500 crore per annum and the total amount of cess collected by the government would be in the range of about Rs 10,500 crore.

This includes the cess amount of 7000 crore per annum at the rate of two per cent imposed a couple of years ago. A one per cent additional cess was imposed in the Finance Act of 2006-07.

The study also says that the number of engineering graduates in India was 3,50,000 annually, compared to 70,000 engineering graduates in US and 100,000 engineering graduates in Europe.

India also produces 60,000 MBAs every year.

Engineering colleges in the country have been growing at two per cent a year while business schools have grown at 60 per cent annually with 348 universities and over 17,973 colleges spread across the country.

In 2005, more than two million graduates were added that included 25,000 doctors and 6 lakh science graduates and postgraudates.

The scenario was almost similar in 2006 also but the number of students that sought loan from various financial institutions was less than three per cent.

The Study has projected that by 2012, India will contribute an additional 44 million to the global labour pool. During this time, the US workforce will expand by ten million.

UNI