As banks shy away from education loans, NBFCs see a lucrative opportunity

PSBs still give 95% of these but much of this is under priority sector lending orders, with high NPAs; the small ones are nimbler and growing much faster in this

While public sector banks are facing high accretion of non-performing assets (NPAs) in the education loans, leading to a marked slowdown in growth, non-banking finance companies (NBFC) are expanding their education loan books. 

Notably, over the last few years, several standalone education loan companies have come-up, and many of them are experimenting with new products too. Further, by adopting a student-led approach, which includes an overall academic screening of students, NBFCs are redefining the norms of education loan lending.

Data from Reserve Bank of India shows, as on February 2018, total education loan outstanding stood at Rs 705 billion, against