Gujarat: Education loans dive 73% in first quarter

AHMEDABAD: With the admission season getting deferred in India and abroad due to the ongoing Covid-19 pandemic, the education loan disbursals in Gujarat plummeted by a whopping 73% in the first quarter of fiscal 2020-21. A sum of merely Rs 112 crore was disbursed towards education loans in April-June as against Rs 426 crore in the corresponding quarter last fiscal, shows data compiled by the State Level Bankers’ Committee (SLBC).
Bankers attributed the decline in education loan disbursals to drastic reduction in uptake of foreign education due to the pandemic.

“As education went online and international travel took a hit, a number of students who were to go abroad have either deferred their plans or have dropped the idea of opting for a loan because most had to attend classes online staying in India itself,” said Vikramaditya Singh Khichi, chairman, SLBC – Gujarat.
“Moreover, in India also the admission season got deferred due to the pandemic. As a result, students opted for disbursals at a later stage, thus causing a dip in disbursal in education loans,” Khichi further added.
Under the state service area credit plan for 2020-21, banks are aiming at a total disbursal of Rs 19,821 crore for education loans as part of the priority sector lending outlay for the financial year.
“This dip is primarily due to many universities across the world deferring admissions or offering online or hybrid medium of education, embassies shutting down impacting visa issuance and restrictions in travel imposed hindering travel to universities or colleges,” said Arijit Sanyal- MD & CEO, HDFC Credila, which is a dedicated education loan arm of HDFC.
“However, in the second quarter of 2020-21, HDFC Credila has experienced a positive growth of over 50% in the number of applications, reflecting a growing interest by students to pursue their higher education plans in the near future,” Sanyal added.
“Most foreign universities have given an option of joining in January intake to foreign students instead of the September intake whereas others have taken the course online as well. For both these reasons, some students may not have opted for loans at all because they save hugely on the lodging and boarding costs. Some may have deferred the disbursal of loans,” said Hitesh Devaliya, director, Endeavour Careers.
Bankers however indicate that in the coming three quarters, disbursal of education loans may once again pick up because the pandemic has impacted incomes, and some may have to take an education loan.