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AN INTERNATIONAL PERSPECTIVE ON THE METHODS AND PRACTICES OF STUDENT LOANS: ITS IMPLICATIONS FOR INDIA

AN INTERNATIONAL PERSPECTIVE ON THE METHODS AND PRACTICES OF STUDENT LOANS: ITS IMPLICATIONS FOR... Student loans are increasingly viewed as an important method of financing higher education in both industrialized and developing countries. The pattern in the methods and practices of student loans in about more than 50 student loan programs is examined by considering the major parameters in the design and operation of student loans. While doing this, the paper builds up hypothetical scenarios on hidden grant versus full loan. Based on the world experience, the paper further elucidates the implications for the current student loan program of India, which was introduced in 2001. The Indian student loan programme is insensitive to the needs of the weaker sections. Hence, an alternative loan programme must be evolved and flexible enough to suit their requirements. Such an alternative loan scheme needs to encourage equal access and participation of the weaker sections. However, considering the generous hidden grant, higher cost of administration of such a loan programme besides low recovery rates, means-tested grants / scholarships are recommended to be in place. JEL Classification: H81, I23 Keywords: higher education, student loans, hidden grant, India http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Economics, Management, and Financial Markets Addleton Academic Publishers

AN INTERNATIONAL PERSPECTIVE ON THE METHODS AND PRACTICES OF STUDENT LOANS: ITS IMPLICATIONS FOR INDIA

P. GEETHA RANI
Economics, Management, and Financial Markets , Volume 6 (4): 105-125 – Jan 1, 2012
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Publisher
Addleton Academic Publishers
Copyright
© 2009 Addleton Academic Publishers
ISSN
1842-3191
eISSN
1938-212X
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Abstract

Student loans are increasingly viewed as an important method of financing higher education in both industrialized and developing countries. The pattern in the methods and practices of student loans in about more than 50 student loan programs is examined by considering the major parameters in the design and operation of student loans. While doing this, the paper builds up hypothetical scenarios on hidden grant versus full loan. Based on the world experience, the paper further elucidates the implications for the current student loan program of India, which was introduced in 2001. The Indian student loan programme is insensitive to the needs of the weaker sections. Hence, an alternative loan programme must be evolved and flexible enough to suit their requirements. Such an alternative loan scheme needs to encourage equal access and participation of the weaker sections. However, considering the generous hidden grant, higher cost of administration of such a loan programme besides low recovery rates, means-tested grants / scholarships are recommended to be in place. JEL Classification: H81, I23 Keywords: higher education, student loans, hidden grant, India

Journal

Economics, Management, and Financial Markets – Addleton Academic Publishers

Published: Jan 1, 2012

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