Educational empowerment: evolution, innovations and challenges of educational financing in commercial banks

This study critically examines the transformative landscape of higher education financing in India, focusing on the shift from traditional government funding to an increased reliance on educational loans provided by commercial banks. The paper employs a detailed methodological approach, utilizing secondary data sources to analyze various aspects of educational financing. The research is structured around key areas: the growth and status of higher education in India, the Gross Enrolment Ratio (GER) trends, patterns in the financing of higher education, and the performance of educational loan schemes under public sector banks. The study examines trends in aggregate public expenditure on education as a percentage of GDP and total expenditure, as well as the streamwise and bankwise distribution of educational loans. It also scrutinizes the growth and performance of educational loan schemes, evaluating the overall effectiveness and challenges within this financing model. The analysis reveals a significant increase in higher education institutions and enrolment rates, accompanied by a shift in funding sources from predominantly government-led to more diversified, including a substantial rise in educational loans. The paper highlights the challenges faced by commercial banks in managing these loans, including issues related to the distribution and repayment of educational loans. The study concludes with insights into the implications of these trends for educational policy, emphasizing the need for a balanced approach in financing higher education that considers affordability and accessibility while ensuring quality and equity.