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Financing Education

<36,3,,,,,,1>The 18th century English essayist, poet and politician Joseph Addison has said that "education is a companion which no misfortune can depress, no crime can destroy, no enemy can alienate, no despotism can enslave. At home, a friend, abroad, an introduction, in solitude a solace and in society an ornament... ". Education is probably the only asset that does not depreciate; it only appreciates over time. Education has a vital role to play in transforming an underdeveloped or a developing nation into a developed one. It serves as the agent of change that can free the poor from deprivation and exploitation and empower their lives.

The education system in India is divided into pre-primary, primary, middle, secondary and higher levels. While the levels of pre-primary to secondary entail development of general learning, it is higher education that provides for specialised learning. According to the Department of Secondary and Higher Education, India has one of the largest higher education systems in the world. Bachelors, masters and doctoral education are the three principal levels of higher education in the country. Other than these, there are also available diploma programmes at both the undergraduate and postgraduate level.

Distance learning programmes are another way of seeking higher education today, which is in keeping with the modern day adage of `life-long learning and life-long earning'. Distance learning programmes enable people to upgrade their workplace skills and develop competencies in new areas. Advanced communication facilities like the EDUSAT have opened up wide possibilities for distance learning in the country. EDUSAT, which is India's first satellite built exclusively for serving the educational sector, is a collaborative project of Indian Space Research Organisation (ISRO), Ministry of Human Resource Development (MHRD), State Departments of Education and Indira Gandhi National Open University (IGNOU).

To encourage higher education in the country and to ensure that no one is deprived of higher education for want of finances, the Government of India in consultation with the Reserve Bank of India and Indian Banker's Association (IBA) has framed a Comprehensive Educational Loan Scheme to cover "all type of courses including professional courses in schools and colleges in India and abroad". The scheme envisages loans up to Rs.7.5 lakh for studies in India and up to Rs.15 lakh for studies abroad. No collateral or margin is required for loans up to Rs.4 lakh and the interest rate in this case is not to exceed the prime lending rates (PLR). For loans above Rs.4 lakh, the interest rate will not exceed PLR plus one percent. The loans can be repaid over a period of five to seven years, with one year grace period after the completion of studies. The repayment of education loan is eligible for deduction under Section 80E of the Income Tax Act.

The prospect thus looks bright for anyone aspiring to take up higher education in India. One can take up higher education in areas and disciplines of one's aptitude and interest. And financing higher education is not all too difficult these days with almost all nationalized banks offering education loans.

Rema Sundar

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