Students aspiring for overseas higher education have started scouting for top-ups or re-scheduling of loans to handle the crisis brought about by a plunging rupee against the dollar and pound in a major way. With the rupee nose-diving and job opportunities as well as salaries shrinking, the Indian borrower will face a daunting task to repay bank loans after meeting living expenses.
The rupee has devalued by 20% in the last 2 months. Students pursuing studies in Unites States (US), Europe or other destinations are in distress since the rupee fell further from the time they gained admission to the present time.
Many banks in India are mulling over introducing changes to tackle the present crisis such as extending the loan repayment period, restructuring the loans, etc. As per State Bank of India (SBI) officials, the bank will conduct revaluation of securities offered by students for loans and work out modalities for loan top-ups.
As per sources, during the years 2012-2013, around Rs. 4,263 crore was allotted as education loans for Karnataka students by all banks. The target for the current fiscal year is Rs. 5,116 crore. During 2007-2008, almost Rs. 2,000 crore was disbursed by Karnataka banks for education loans-which happen to be the second-highest growing section for banks, ranking after the housing sector.
As per SBI officials, the bank is mulling over rescheduling the duration of previous education loans from the current 7 to 12 years, which is the norm for new loans.
A lot of uncertainty about the depreciation of rupee exists as well due to which decision-making regarding loans have been put on hold, the SBI officials added.
As per Syndicate Bank officials, the bank authorities have instructed individual branches to make provisions for rescheduling loans under its Synd Vidya scheme, in order to aid borrowers.
Studying abroad is proving to be a huge dent on the pockets of the hapless students. They are feeling the pinch of rising costs of air fare, food and living expenses, tuition fees, etc. brought about by the falling rupee. Part-time job options are not easily available in foreign countries. Due to strict visa rules, acquiring a permanent job is not an option as well, as per Indian students pursuing their higher education in foreign countries.
Source: The Hindu
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