The UPA government would soon come forward to extend sovereign guarantee to encourage students to avail of loans for higher and professional studies, Union HRD Minister Arjun Singh said here on Saturday.
This is to reduce the cumbersome and tedious processes involved in educational loans, due to insistence of banks on collateral securities. The minister announced this at the fourth ASSOCHAM conference on Reforms on the higher education sector.
The minister said that the ministry of human resource development is actively considering to come forward as a sovereign guarantor against those loans incurred for higher and professional studies as banks and financial institutions continue to insist on a collateral.
A vast majority of students are unable to take loans and therefore, stop pursuing their higher and professional education, because banks and financial institutions insist on collateral and parental guarantee. To ensure that loans are conveniently extended to the needy, particularly from the weaker sections of society, the proposal of sovereign guarantee was under active consideration and could be made public any time, indicated the minister.
On the issue of reforms in higher education, while the minister agreed that certain reforms were necessary, he made it clear that the fate of reforms and to which extent will these be carried out should remain under the exclusive domain of the academicians and certainly not the private sector.
Speaking on the occasion, D Purandeswari, minister of state for HRD, said that most of the academic institutions have been running short of faculties to the extent of 25-30% and sought that the shortage be filled immediately so that students are imparted proper and continuous education.
She called for private participation in running even the government-managed schools, colleges and other institutions of higher learning as the expertise in the private sector would also help the government in churning out new courses that are innovative and can bring the students jobs with convenience.