Use data on education loan defaults to rank courses

Information on default rates of specific courses and institutions should be made available to the public. Students could use it as one of their selection criteria

A recent news item said that public sector banks are turning cautious about sanctioning fresh education loans as non-performing assets (NPAs) are at a high of 8 per cent. Outstanding education loans stood at around Rs 80,000 crore on June 30, 2022.

Education loans are inherently risky for lenders. The typical borrower takes two-five years to complete the course. She hopes to pay the loan (usually large-sized) along with interest back after completing her course. This is contingent on her ability to get a job that pays a salary which is adequate to allow repayment.

No collateral is required for