Twenty per cent of engineering students from Andhra Pradesh and Telangana state (with loans of up to Rs 4 lakh) are defaulters in a list prepared by the State Bank of India.
Telangana state Chief Minister K. Chandrasekhar Rao has often stated that mushrooming of private engineering colleges in the undivided Andhra pradesh state has lowered the quality of Engineering education so much that fresh engineers are finding it difficult to get jobs. Except for students from top private colleges, others are either working for meagre salaries or unemployed. And its impact is seen in repayment of education loans.
There is, however, no problem with Telugu students who took loans in other categories (up to Rs 7.5 lakh and up to Rs 10 lakh) for higher studies in 115 premier institutions in any part of the country like IITs, IIIMs, NIT etc. and even ISB (nearly Rs 30 lakh).
The EMI schedule starts a year after completion of the course, and almost all students repay the same. Some, who get good jobs with large paychecks, are even keen on clearing the loan amount in advance as there are no pre-payment charges in banks like the SBI.
However, the problem is with students of private engineering colleges in Telangana State and Andhra Pradesh state. “We gave loans to many students who secured engineering seats and who had passed in First Class in Intermediate and SSC. Call it lack of quality education or their sheer bad luck, not many could get decent jobs. They are in a helpless state to repay the EMIs. However, we are giving a one-year extension to all those approaching us with genuine problems,” an SBI official said.
SBI has disbursed nearly Rs 2000 crore as education loans since 2011 under different categories. Only 1.38 per cent have defaulted. Of the total amount, Rs 51 crore was given under the `4-lakh and below category, and in this case 25 per cent have defaulted.
Meanwhile a new, “Global ‘Ed’vantage Scheme” (loan from Rs 20 lakh to Rs 1.5 crore) will be introduced from this academic year to enable meritorious students from middle class families pursue higher education in globally acclaimed institutions like the Harvard Business School, Stanford University and Yale University.