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International Journal of Advanced Scientific

Research & Development e-ISSN: 2395-6089
p-ISSN: 2394-8906
Vol. 02, Spl. Iss. 02, Ver. I, Aug’ 2015, pp. 40 – 47

Student Awareness towards Educational Loan

Dr. G. RAVISELVAM
Associate professor, Department of Commerce, A.V.C. College (Autonomous), Mayiladuthurai.

G. MAHESWARI
Research Scholar, Department of Commerce, A.V.C. College (Autonomous), Mayiladuthurai.

ARTICLE INFO ABSTRACT

Article History:
Received: 07 Jul 2015;
Accepted: 08 Jul 2015;
Published online: 10 Aug 2015.
Key words:
Education System,
Educational Loan Interest
Rate.
Copyright © 2015 IJASRD. This is an open access article distributed under the Creative Common Attribution
License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original
work is properly cited.
India's higher education system is the third largest in the
world, next to the United States and China. The main
governing body at the tertiary level is the University
Grants Commission, which enforces its standards, advises
the government, and helps coordinate between the Centre
and the state. Accreditation for higher learning is overseen
by 12 autonomous institutions established by the
University Grants Commission. Due to lack of finance the
Indian students are not able to get quality education.
Therefore, there is a need for high grade of private sector
participation in the field of education in terms of finance.
The government is trying to providing many schemes and
public banks are supporting students in terms of education
loan but not up to that extent, present study analyses,
Educational system in India, Educational loan interest
rate provided by commercial banks in India, students
awareness level of getting educational loan.

INTRODUCTION
Education is the process of instruction aimed at the all-round development of
individuals, providing with necessary tools to participate in day to day activities of the
world. It dispels ignorance and boosts moral values in the individuals. It forms the basis
for lifelong learning and inspires confidence to face challenges; besides providing skills
to become more self-reliant and increases awareness. Education not only impacts the
human development and economic growth, but is the fundamental requirement of
democracy. Through education, people become more responsible and informed citizens,
and can voice their concerns and issues in political system of their society. Education is
the key, which allows people to move up in the world, seek better jobs and ultimately
succeed in their life. In India, getting education has been a big problem since long. A
How to cite this article: Raviselvam, G., & Maheswari, G., (2015). “Student Awareness towards Educational Loan”.
International Journal of Advanced Scientific Research & Development (IJASRD), 02 (02/I), [Special Issue – Aug’ 2015],
pp. 40 – 47.
International Conference on Innovation in Commerce and Management (ICONICM – 2015) |
Organized by Department of Commerce, A.V.C. College (Autonomous), Mannampandal,
Mayiladuthurai – 609 305, Tamil Nadu, India.

small minority in the elite class get access to excellent education facilities; whereas the
poor practically get no education at all.

1.1 Educational System in India

In ancient times, India had the Gurukula system of education in which anyone
who wished to study went to a teacher's (Guru) house and requested to be taught. If
accepted as a student by the guru, he would then stay at the guru's place and help in all
activities at home. This not only created a strong tie between the teacher and the
student, but also taught the student everything about running a house. The guru taught
everything the child wanted to learn, from Sanskrit to the Holy Scriptures and from
Mathematics to Metaphysics. The student stayed as long as she wished or until the guru
felt that he had taught everything he could teach. All learning was closely linked to
nature and to life, and not confined to memorizing some information.
The modern school system was brought to India, including the English language,
originally by Lord Thomas Babington Macaulay in the 1830s. The curriculum was
confined to “modern” subjects such as science and mathematics, and subjects like
metaphysics and philosophy were considered unnecessary. Teaching was confined to
classrooms and the link with nature was broken, as also the close relationship between
the teacher and the student.
The Uttar Pradesh (a state in India) Board of High School and Intermediate
Education was the first Board set up in India in the year 1921 with jurisdiction over
Rajputana, Central India and Gwalior. In 1929, the Board of High School and
Intermediate Education, Rajputana, was established. Later, boards were established in
some of the states. But eventually, in 1952, the constitution of the board was amended
and it was renamed Central Board of Secondary Education (CBSE). All schools in Delhi
and some other regions came under the Board. It was the function of the Board to decide
on things like curriculum, textbooks and examination system for all schools affiliated to
it. Today there are thousands of schools affiliated to the Board, both within India and in
many other countries from Afghanistan to Zimbabwe.
Universal and compulsory education for all children in the age group of 6-14 was
a cherished dream of the new government of the Republic of India. This is evident from
the fact that it is incorporated as a directive policy in article 45 of the constitution. But
this objective remains far away even more than half a century later. However, in the
recent past, the government appears to have taken a serious note of this lapse and has
made primary education a Fundamental Right of every Indian citizen. The pressures of
economic growth and the acute scarcity of skilled and trained manpower must certainly
have played a role to make the government take such a step. The expenditure by the
Government of India on school education in recent years comes to around 3% of the
GDP, which is recognized to be very low.
“In recent times, several major announcements were made for developing the
poor state of affairs in education sector in India, the most notable ones being the
National Common Minimum Programme (NCMP) of the United Progressive Alliance
(UPA) government. The announcements are; (a) To progressively increase expenditure
41 Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015
 Student Awareness towards Educational Loan

on education to around 6 percent of GDP. (b) To support this increase in expenditure on

education, and to increase the quality of education, there would be an imposition of an
education cess over all central government taxes. (c) To ensure that no one is denied of
education due to economic backwardness and poverty. (d) To make right to education a
fundamental right for all children in the age group 6–14 years. (e) To universalize
education through its flagship programmes such as Sarva Siksha Abhiyan and Mid-Day
Meal.”
The following table gives the modern education system in India

Table1
Grade Grade Age Age
Education School/Level Years Notes
From To From To
Includes
Primary Elementary School 1 8 6 14 8 standard IX
and XII
Senior
Secondary Secondary
Secondary 9 12 14 18 4
School School or
Junior college
University /
Tertiary Nil Nil Nil Nil Nil Nil
College Level
Technical Undergraduate
Tertiary 4
Institutions Degree
Others PG
Sources: Secondary data
Primary Education: Elementary education in India is a major challenge for
government, and many children are still deprived of what is treated as a fundamental
human right under Indian law. It comprises 8 years of school starting at age 6, and
efforts are ongoing to engage communities where child labor is still common practice.
The goal is to provide useful, relevant information in preparation for secondary
education. Young females, particularly, are still being systematically deprived of this
opportunity
Secondary Education: In the course of the final 4 years of Indian school
education a bridge is built between the foundations laid by primary education, and in
the vocational or tertiary education that may follow. Although overall standards are
controlled by examining boards, the curriculum is still largely based on the system that
the British colonialists left behind. Pupils and their parents may choose between state
or commercial schools, or those with associations with religious dogmas.
Vocational Education: Young people who do not wish to go on to tertiary
education, or who fail to complete secondary school often enroll at privately-owned
vocational schools that specialize in just one or only a few courses. In doing they
prepare themselves to face the impact of the liberalization and globalization of the
Indian economy - sadly, though many young women are still denied this opportunity.
Tertiary Education: India is justifiably proud on its universities which are
mainly funded by state governments, and many are centers of excellence. The 12 larger
Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015 42
International Conference on Innovation in Commerce and Management (ICONICM – 2015) |
Organized by Department of Commerce, A.V.C. College (Autonomous), Mannampandal,
Mayiladuthurai – 609 305, Tamil Nadu, India.

ones are funded by the central government though, which is more generous in its
financial support. Although engineering and business colleges are accredited to a central
body known as the AICTE, the Medical Council of India moderates all medical colleges.
Progress is being made with managing teacher training in a similarly functional way.

EDUCATION LOAN IN INDIA

Securing education loan in India may sound easy, but is full of obstacles, and
formalities. Government, in order to facilitate loan disbursal has simplified the norms;
but, still there remain many more in place, that come in the way of a student getting
educational loan. Some of the challenges faced by students as well as banks, includes
customization of loan product to suit the requirements of the students and that of
courses; margin money requirements; collateral security sufficient enough to cover the
loan amount; proof of appropriateness of the University, College and Course applied for;
timely approval of loan to meet the admission related deadlines; post disbursal issues
etc. These activities consume a lot of energy, time, effort and money. The financial
institutions use all relevant information available from different sources, and with the
help of credit scoring models, do the credit profiling of the student. This helps it, in
working closely with students and parents to try and design appropriate education loan
program for them. The following schedule gives interest rate providing commercial
banks in India. Central and state and private sector banks.

Table – 2: Educational Loan Interest Rate (Schedule 1)

Interest Rate (in
Interest %) for loan amount
Bank Name / Product Name
Rate Type Up to 4 4 to 7.5 Above
lakh lakh 7.5 lakh
SBI – India Floating 11.25 12.75 11.75
Bank of Baroda - India Floating 10 12 12
IDBI Bank – India Floating 11.25 11.5 11.5
Allahabad Bank - India Floating 11.25 11 11
HDFC Bank – India Fixed 12 - 14 12 - 14 12 - 14
Andhra Bank - India Fixed 11 12.75 12.75
Bank of India - India Floating 9.5 10 10.75
Bank of Maharashtra - India Floating 10.25 11 11
Canara Bank - India Floating 11 12 9.75
Central Bank of India - India Floating 10 10 10
Dena Bank – India Floating 10 12.5 12.5
Federal Bank - India Fixed 13.25 14.75 14.75
Indian Bank – India Floating 12.5 12.5 12.75
Indian Overseas Bank - India Fixed 10.25 11.5 11.5

43 Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015
 Student Awareness towards Educational Loan

Karnataka Bank - India Fixed 12.25 13.25 13.25

Oriental Bank of Commerce - India Floating 10.75 11.5 11.5
Punjab National Bank - India Floating 10.5 11.25 11.25
State Bank of Mysore - India Floating 11.25 12.75 NA
UCO Bank – India Floating 11.25 11.75 11.75
Union Bank of India - India Fixed 11.75 12.25 11.5
Vijaya Bank – India Floating 11 11 11
City Union Bank - India Fixed 13.75 14.5 14.5
Punjab & Sind Bank - India Floating 12 12 NA
Syndicate Bank - India Floating 10 10 9.5
United Bank of India - India Floating 10.25 11 NA

2.1 Objectives of Study

 To examine students awareness level of getting educational loan.
 To identify what factor induces them to getting educational loan.

RESEARCH METHODOLOGY
3.1 Types and Sources of Data
The source of data used in this study was collected from primary and secondary
data.
Primary data collection was done through a questionnaire. Secondary data was
collected with the help of annual reports of the banks, manual of instructions on loans
and advances, books, articles and research papers and internet.

3.2 Questionnaire Design

A structured questionnaire was framed for conducting the survey. The
questionnaire was presented with exactly the same wordings and in the same order to
the entire respondents.

3.3 Population
The sample size of the study is 100 respondent namely the college students.

3.4 Sampling Procedure

Sampling technique used for the collection of data required for this research
study is simple random sampling method.

3.5 Sample Size

Sampling size is complex and involves several qualitative and quantitative
considerations. Here sample size is 100.

3.6 Limitation of the Research

The research is limited to the information collected by structure questionnaire to
the students. The sample size is 100.
Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015 44
International Conference on Innovation in Commerce and Management (ICONICM – 2015) |
Organized by Department of Commerce, A.V.C. College (Autonomous), Mannampandal,
Mayiladuthurai – 609 305, Tamil Nadu, India.

DATA ANALYSIS AND INTERPRETATION

Table – 3: How did you Come to Know about Educational Loan?
Variables No. of respondents Percentage
Friends & Relatives 30 30%
Media 15 15%
Bank 20 20%
Educational institution 17 17%
Local politicians 10 10%
Others 08 08%
Total 100 100%
Source: Primary data
Interpretation: out of 100 students surveyed 30% were know about friends &
Relatives,15% were know about media,20% were know about bank,17% were know
about educational institution, 10% were know about local politicians ,8% were know
about others.

Table – 4: Gender of the Student

Variables No. of respondents Percentage
Male 60 60%
Female 40 40%
Total 100 100%
Source: Primary data
Interpretation: out of 100 students’ surveys, 60% were males and 40% were
female.

Table – 5: By Whom you were Motivated to Avail Educational Loan?

Variables No. of respondents Percentage
Friends & relatives 28 26%
Local politicians 21 21%
Bank officials 20 20%
Educational institutions 26 28%
Others 05 05%
Total 100 100%
Source: Primary data
Interpretation: out of 100 students surveyed, 28% were motivated in friends &
relative, 21% were motivated in local politician, 20% were motivated in bank officials, 26
% were motivated in educational institution, 5% were motivated in others.
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 Student Awareness towards Educational Loan

Table – 6: What Prompted you to Avail Educational Loan from Commercial Bank?

Variables No. of respondent Percentage

Cheap and assured loan of government 21 21%
Publicity by bank 25 25%
Advertisement in media 20 20%
Recommendation of local politicians 14 14%
Highly indebted to other loans 20 20%
Total 100 100%
Sources: Primary data
Interpretation: out of 100 students surveyed 21% prompted for cheap and
assured loan of government,25 % were prompted for publicity by bank, 20% were
prompted for advertisement in media,14% were prompted for recommendation for local
politicians,20% were prompted for highly indebted to other loans.

Table – 7: Level of Awareness regarding Educational Loan

Variables Level No. of respondent Percentage

Pre-condition for sanction loan Fully aware 35 35%
Borrowing limit Somewhat aware 25 25%
Rate of interest Fully aware 30 30%
Repayment period No knowledge 10 10%
Total 100 100%
Sources: Primary data
Interpretation: out of 100 students surveyed 35% students were fully aware of
pre-condition for sanction loan, 25% students were somewhat aware of borrowing limit,
30% were fully aware of rate of interest, 10% were no knowledge of repayment period of
educational loan.

FINDINGS
5.1 Percentage Analysis
1. Most of the students are known about educational loan from friends and
relatives.
2. It is inferred that majority of the students are male.
3. Most of the respondents are motivated by educational institution.
4. It is inferred that majority of the students are prompted to avail in educational
loan from publicity of bank.
5. Most of the respondents are fully aware of pre-condition of sanction loan &
interest rate.
Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015 46
International Conference on Innovation in Commerce and Management (ICONICM – 2015) |
Organized by Department of Commerce, A.V.C. College (Autonomous), Mannampandal,
Mayiladuthurai – 609 305, Tamil Nadu, India.

CONCLUSION
This research study concluded that Most of the students are not aware of the
getting educational loan from bank, the commercial bank conduct some student
awareness programs for the rural and urban students ,it can help to improve the higher
education in India.

REFERENCE
[1] Kothari. C.R, (2007) Research Methodology, New Age International Publication, New
Delhi.
[2] Wikipedia Educational system in India
[3] http://www.apnaloan.com/education-loan-india/rates.html

47 Volume 02, Special Issue 02, Version I | 10th & 11th August’ 2015