AHMEDABAD: Greater numbers going for foreign education have led to an increase in education loan credit outflows, at least in Gujarat. Disbursal of education loans in Gujarat rose from Rs 2,274 crore at the end of the first quarter of 2018-19 to Rs 3,790 crore in the corresponding quarter of 2019-20 – a sizeable 69% increase, states the latest report by State Level Bankers' Committee (SLBC). Bankers said that ease of visa availability for some countries has led to a significant growth in foreign education aspirants, even for short-term courses.
"We have noticed substantially higher number of student applicants from Gujarat, who pursue short term courses like certificate/ diploma courses in petrochemical, data science, or cyber security, among others, at colleges which are governed by the provinces of Canada," said Ajay Bohora, co-founder, MD & CEO, HDFC Credila.
Tax benefits, too, drove an increase in education loan uptakes, according to a foreign education consultant. "Effective cost of education goes up abroad due to the Indian rupee depreciating against the US dollar. Better awareness about availability of finance coupled with tax benefits often encourages students to opt for loans," said the consultant without willing to be named.
Bankers said a majority of student loan applicants seek financial assistance for higher education. "We have identified some high-ranking institutes across India and in foreign countries as well, for which we provide collateral-free loans based on students’ merit. The disbursements from our bank are typically high in the first quarter owing to admissions in the fall intake," said Tulsi Bagwale, general manager chief coordinator, Bank of Baroda – Gujarat and Rajasthan.
Source : The Times Of India