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INTRODUCTION
With time higher education is becoming expensive and unaffordable for the
common people and specially for the people living below the poverty line. It is
a burning issue for the people of the developing country like India for which
they face scatting problems to enrole their wards/sons & daughters in the
higher education institutions to shape the destiny of their future life which
leads to human resource development and development of the country as a
whole. To combat, education loan is provided to students by several banks,
and other alike financial institutions. A student loan for education purpose is a
type of loan which is designed to help students pay for their higher education
in terms of associated fees such as tution, books and supplies and living
expenses. It differs from other types of loan in that the interest rate is
substantially lower and the repayment schedule is deferred while the student
is still in the learning process. It also differs in many countries in the strict laws
regulating negotiating and bankruptcy. Since loans cannot be claimed as a
matter of right as it is a debt. Therefore, the borrower is obliged to pay back or
repay the under the same at later period. Students loan for education purpose
i, e the education loans are classified as priority sector and are to be
encouraged. These loans are to be treated as investment for future economic
development and property. Most of the developed and developing countries
have student loans schemes and India is not separate from those countries. In
India, the education loan scheme was originally started to help meritorious
student pursue higher education in technical and professional courses.
However, over the years, rules and regulation got diluted and any student who
got admission in a course became eligible for a loan, irrespective of the marks
or the process employed in admission.

A. Education Loan: Why for?

To provide the much needed financial support to deserving students
for pursuing higher professional, technical or general education in India
and abroad, the students loan is seem to be very essential now a days to
give right support at right time for ensuring success of student. The loan
would be provided to those students who have obtained admission to
 carrier oriented courses like medicine, engineering ,management and
other general educations , either at the graduate or at the post graduate
level. No deserving students should be stopped to pursue their dreams
due to lack of money because they are the future of the nation.

B. The eligibility required :

Based on the following eligibility criteria, a student can apply for the
educational loan
1. Indian national of age between 16 to 35 years, pursuing graduate/
post graduate degree and PG diplomas.
2. Confirmed admission in a college/universities recognised by
UGC/Govt./AICTE etc., such as management, engineering , medicine,
computer science , architecture , hotels and hospitality , agriculture ,
fine arts and design , pure science/ BA /MA /B.com /M.com ,some
vocational training and technical training courses such aviation and
air- hostess training are sometimes included too.
3. A collateral security for the loan amount of more than rupees 7.5
lakh.
4. Mendatory requirement of co-applicant in form of parent / guardian
/ spouse/ parent in-law for all full time programmes.
C. Coverage of educational loan :
The educational loan covers 100 % college tution fees payable,
accommodation charges , exam and library fees , books and equipment
including computer , travelling expenses abroad , other reasonable
expenses required to complete the courses.
D. The timeline :
The minimum time required to get an approval for application in
the bank to convey its decision to the applicant is within 15 working days
from the date of receipt of the admission provided the application is
complete in all respects.
E. Quantum of finance and disbursement :
 Normally the bank approved an amount of rupees 10 lakhs for
studying in India and rupees 20 lakhs for studying abroad but banks may
consider lending higher amount in special case at their discreation .

The student loan for educational purpose will be disbursed in

full or in suitable instalments taking into account the requirement of funds and
/ or fee schedule as assessed by the bank directly to the educational
institutions or vendor of books or equipment or instruments.

F. Margin money , moratorium period for repayment , security and tenure :

The margin money is nil for loan upto rupees 4 lakhs , 5% for
study in India on loan above rupees 4 lakhs and 15 % for study in abroad
on loan above rupees 4 lakhs.
The moratorium period for repayment of loan is the course
period plus 1 year or 6 month after getting job , whichever is earlier.
The security for availing such loan are as follows
Upto rupees 4 lakh no security , but in this case parents needs
to be a joint borrower.
Between 4-7.5 lakhs a long with parents collateral security in
form of third party guarantee.
Above 7.5 lakhs parents to be joint borrowers plus tangible
collateral security of suitable value required.
Security for the loan is determined by the quantum of
amount required and the credit worthiness of the principal
borrower. Following types of collateral are accepted :
i. Residential property (house/flat/apartment)
ii. Fixed deposit.
iii. Life insurance (sum assured being at least 100% of the education loan
amount).
iv. Non agricultural land.
Loan tenure upto rupees 7.5 lakh is normally upto the level of 15
years and above respectively based on the amount of loan.
G. Documents required:
The following documents are required to get the opportunity of
availing students loan for educational purpose :
Letter of admission.
 Detailed break up of the cost of the course.
Completed loan application formed and photographs.
KYC ( know your customer ) document.
Academic : mark sheets / pass certificate of S.S.C ,H.S.C ,degree
courses.
PAN card of the student and parent / guardian.
AADHAR card of the student and parent / guardian.
Proof of the identity ( driving licence / pass port / electricity
bill/telephone bill ).
Student / co-borrower / guarantors bank account statement for
last 6 months .
IT return /IT assessment order , of previous 2 years of parent
/guardian / other co-borrower ( if IT payee ).
Brief statement of assets and liability of parent / guardian / other
co borrower .
Proof of income ( i, e salary slips /form 10 ) parent/ guardian
/other co borrower ).
H. Interest rates :
Different bank have different bank interest rates on the
study loan. These interest rate is equivalent to the addition of base rate
and the mark up where the base rate ranges between 9.5 lakhs to 10 %.
The total interest rate comes between 11.75 % and 14.75 % depending
on the bank, loan amount and the college concern. Girls student may
avail of slightly cheaper rates by upto 0.50 % .
IMPORTANCE OF THE STUDY:
Since on the basis of present educational scenario , students
educational loan in the developing country like India is an inevitable
requirement of the future generation of the country. Therefore it is felt that
the analysis of student educational loan provided by SBI which occupies lion
share of the Indian banking system is necessary. It is also felt that the analysis
will help the needy student of our region / area .

OBJECTIVES OF THE STUDY:

The prime objective of present study is to

a) Look into the details of student educational loan provided by the SBI
mesra.
b) Analyse the pros and cons of the educational loan providers and its
beneficiaries.
c) Put suggestions towards concluding marks based on the basis of the
study.

METHODOLOGY OF THE STUDY:

The methodology of the study is both descriptive and analytical. Both primary
and secondary data are collected. The study covers latest 3 years from 2014 -
15 to 2016 17 both years inclusive. Data and information are collected from
various books , journals , magazines , periodical newspapers etc. Discussions
were also made with the senior officials of the SBI . To make this study realistic
and fruitful , a questioner was drafted. Based on the data source and to get a
general idea on the subject matter the methodology for analysis using basic
statistical tools is considered here. These are percentages, averages, standard
deviation etc which can easily pin point the most significant feature of the data
source on the basis of which general conclusion towards suggestive remarks
can be made possible.
 *About SBI educational loan :

The State Bank of India (SBI ) is one of the top education loan
providers in India. Every year the bank rents loan to the students who
wants to get enrole in various recognised universities and institutions in
India and abroad with no processing fee. The candidates who take
educational loan upto rupees 4 lakh or between rupees 4 lakh and 7.5
lakh will get 10 years to repay the amount . The repaymet period for the
loan amount above 7.5 lakh is 20 years .

State bank of India is an Indian multinational financial services

company that was founded in 1921.State bank of India has an operational
presence of over 14,000 branches in India serving millions of happy customers.
The bank has a much diversified portfolio that includes services in personal
banking, business banking and international banking services.

SBI education loan is of three categories-for studies in India and

abroad, for studies in premier Indian institutions and loan for pursuing
vocational education and training.

Features of SBI education loan:

Purpose:

SBI student loan scheme is offered to Indian nations for pursuing higher
studies in India or at a foreign institution. SBI scholar loan scheme is offered to
students who have secured admissions in premier Indian institutions. A
separate loan scheme is offered for pursuing vocational education training in
India.

Expenses considered for SBI education loan:

The following expenses are covered for both the student loan scheme and loan
for vocational education.

*.Tuition and course fee

*.Examination , library and laboratory fees

*.Caution deposit
*.Cost of books, equipment and other instruments.

The following expenses are considered only for the student loan scheme and
not for the vocational training loan.

*.Cost of two wheeler up to Rs.50,000

*.Travel expenses and passage money for abroad studies

*.Caution deposit, building fund and other refundable deposit which amounts
up to10% of the tuition fees for the entire semester

*.Any other expenses required to complete the coursework like study tours,
thesis, project etc.

Amount of Education Loan:

*.SBI student loan scheme

A maximum of Rs.10 lakhs is offered for studies in India. For studies abroad, a
maximum of Rs. 30 lakhs is offered as loan.

*.SBI scholar loan scheme

Category of
the Maximum loan limit
educational
institution

Without With security

security

List AA Rs.30 lakhs NA

List A Rs.20 lakhs Rs. 30 lakhs

List B Rs. 2o lakhs NA

List c Rs. 7.5 lakhs Rs. 30 lakhs

 *.Loan scheme for vocational education and training

For courses of period up to 6 months loans up to Rs. 50,000 are

provided. A maximum of Rs. 1 lakh is provided as loan for courses
of duration above 6 months.

INTEREST RATE :

*.SBI Student Loan Scheme

Loan Amount Rate of Interest

Up to Rs. 5 lakh 3.50% above base rate

Above Rs.4 lakhs and up to 3.75% above base rate

Rs.7.5 lakhs

Above Rs.7.50 1.75 % above base rate

lakhs

The base rate is fixed at 9.85 %. Do make an enquiry with

the bank about the prevailing base rates. A concession of 0.50 % is provided for
girl students and a 1 % concession is offered for full tenure of loan, if the
interest is serviced promptly during moratorium and course period.

*
.SBI Scholar loan scheme

Type of institution Interest rate per annum

List AA 25 bps above the base

rate(10.10% at present)

List A 25 bps above base

rate(10.10% at present)

List B For unsecured loan up to

Rs.20 lakhs, 50 bps above
base rate(10.35% at
present)

List C 175 bps above base

rate(11.60% at present)

For list B institutions, the interest rate is 25 bps if the

collateral security provided is equal to or greater than the loan amount or if
the applicants work experience is greater than two years. Do contact the bank
for a comprehensive classification of the educational institutions as per the
type AA, A, B or C.

*.SBI Loan for vocational Education and Training

The rate of interest is fixed at 3.50% above the base rate of 9.85%

Processing Fee:

No processing fee is charged for SBI education loans.

Repayment Tenure:

*.SBI Student Loans

 Maximum Loan Repayment Period
Amount

Up to Rs.4 lakhs Up to 10 years

Above Rs.4 lakhs to Up to 10 years

up to Rs.7.5 lakhs

Above Rs.7.5 lakhs Up to 12 years

*.SBI Scholar Education Loan

The maximum repayment tenure is 12 years. The repayment period

starts after 6 months of course completion.

*.SBI Loan for Vocational Education and Training

For course of duration up to 1 year, the repayment period can be up to 3

years. For course of duration above 1 year, the repayment period can extend
up to 5 years.

Security:

*.SBI student Education Loan

Loan amount Security

Up to Rs.4 lakhs Parent or guardian as co-

borrower

Above Rs.4 lakhs and to Parent or guardian as co-

Rs.7.50 lakhs borrower and collateral
security in the form of a
third party guarantee

Above Rs.7.50 lakhs Parent or guardian as co-

borrower and tangible
collateral security
 *.SBI Scholar Loan Scheme

Tangible collateral security of full value is to be provided and parent or

guardian should sign up as co-borrower only to avail extra loan amount for list
A and list C institutions. Loans can be availed without security also under the
scholar scheme.

*.SBI Loan for Vocational Education and Training

No collateral or third party guarantee is taken. But, parents or guardian

will have to execute the loan documents as co-borrower.

Margin:

For SBI student Loan Scheme, there is no margin for loans up to Rs.4
lakhs. For loans above Rs.4 lakhs, the margin is 5% for studies in India and 15%
for studies abroad.

Eligible courses:

*SBI Student Education Loan

For studies in India, graduation and post graduation technical

courses(degree and diploma) conducted by colleges approved by UGC, AICTE,
IMC and the government of India are covered. Also, teacher training, nursing
courses and other diploma courses like pilot training, shipping etc. as approved
by the concerned regulatory authority are covered under the loan. For studies
abroad, job-oriented professional graduate and post-graduate courses like
MCA, MBA, MS, courses conducted by CIMA- London, CPA-USA are approved
for loan.

*.SBI Scholar Loan Scheme

Regular full-time degree and diploma courses for which the student is
granted an admission through merit based admission process or entrance test
is covered under the loan. Also, full time executive management courses like
PGPX are approved for loan.
 *.SBI Vocational Education and Training Loan

Vocational courses and skill development courses of duration 2 months

to 3 years run by a government department or an organisation supported by
National Skill Development corporation leading to a recognized Government
organization are approved for the loan.

List of Approved Educational Institutions:

*.For the SBI student scheme, educational institutions in India

recognized by UGC/AICTE/IMC and government of India are approved.
Reputed foreign institutions abroad, CIMA and CPA courses are also approved
for loan.

*.SBI scholar loan scheme is provided for education in 93 premier Indian

institutions. Contact the bank for the list of institutions that fall under the elite
category.

*.Vocational, skill development courses offered by the government or an

organisation certified by the government is approved for loan under the SBI
Vocational Education and training loan category.

Documentation required :

The following documents are to be submitted to complete the

application process.

*.Letter of admission

*.Duly filled and signed loan application form.

*.2 recent passport size photographs.

*.Statement of cost of study.

*.PAN card , AADHAR card of student and parent / guardian.

*.Proof of identity and proof of residence.

*. IT returns or IT assessment order of previous 2 years of the co-

borrower
 *. Statement of assets and liabilities of parent/guardian.

*. Proof of income of parent / guardian.

Eligibility :

The applicant should be an Indian national and should have secured an

admission in a recognized educational institution. For SBI scholar schemes , the
student should have secured an admission in one of the 93 premier Indian
institutions. Similarly, for vocational education loan , the student should have
obtained an admission in a government certified training institute.
CONCLUSION :

Based on the data analysis and findings obtained after analysing the data
following conclusions can be made

Though female beneficiaries in comparison to males is more so far the

case of availing loan opportunity is concerned , still then it is observed
that the refusal rate of female is much more higher than the male to
avail such opportunity.
IN terms of averages and standard deviation of four different categories
it can be concluded that the data variability is much more higher for
females than the males.
From the analysis of co-efficient of variation it is seen that the data for
female is more efficient , consistent and reliable. Since , the co
efficient of variation of female is smaller than the co-efficient of
variation of male.
After getting the approval student educational loan from the SBI branch
at the particular area it is seen that the most females student do not opt
for the same than the male student even after getting a relaxation of
0.05 % interest rate during reimbursement. This might be the reason
that female students in the last few years past their intermediate level
with high percentage than the male students in the area for which their
enhance of getting educational scholarship given by different agencies is
higher than the male.
 DATA ANALYSIS AND INTERPRETATION
The data source shown in the table below is considered for analysis based on
the methodology mentioned earlier.

TABLE NO: 1

Table showing details of student educational loan

SEX NUMBER OF STUDENTS
Applied for loan To whom the Bank Who refuse to take Beneficiaries
provided loan the loan opportunity

Male 21 15 4 11

Female 39 35 11 24

TOTAL 60 50 15 35

From the table 1 we see that the percentage of

male student applied for the education loan at the aforementioned branch of
SBI is 35 % and that of female is 65% . Accordingly the male female
percentage rate to whom the bank provide loan is 30% and 70 % respectively ;
the percentage of male refusal after getting the loan opportunity is 26.67 %
and that of female is 73.33 %. Similarly the percentage of male and female
beneficiaries are 31.43 % and 68.57 % respectively.
 The mean of male and female students for the above
categories are respectively 12.75 and 27.25. While their standard deviations
are 6.1796 for males and 10.8714 for females. Co-efficient of variation for
male and female categories are 48.47 % and 39.90 % respectively.