Financing Higher Education A Study of Educational Loans

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Financing Higher Education A Study of Educational Loans. CMDR Monograph Series No 61, All rights reserved This publication may be used with proper citation and due. acknowledgement to the author s and the Centre For Multi Disciplinary Development. Research CMDR Dharwad, Centre For Multi Disciplinary Development Research CMDR Dharwad. First Published December 2010,Monograph 61 Page 2, Financing Higher Education A Study of Educational Loans. FINANCING HIGHER EDUCATION,A STUDY OF EDUCATIONAL LOANS. Dr S Puttaswamaiah,Assistant Professor,Department of Economics.
Bangalore University, Education assumes significance as a provider of input for economic political and social. development besides as a source of knowledge Economic growth in recent years has been based on. availability and quality of knowledge in any country which in turn depends on access and. affordability to education Hence importance of education has increased to supply adequate and. qualitative human capital Functioning of education sector depends on availability of various. resources of which to a large extent on financial resources Finances for education are mobilized. from different sources like government spending fees educational loans and others Among these. educational loan has been seen as an alternative way of financing for education In this background. the present paper tries to analyse the trends and patterns of educational loan in India Further an. attempt has been made to understand pattern of student loans provided by selected commercial. banks The study finds that educational loan is increasing over the years. Monograph 61 Page 3, Financing Higher Education A Study of Educational Loans. FINANCING HIGHER EDUCATION,A STUDY OF EDUCATIONAL LOANS. Dr S Puttaswamaiah 1,1 INTRODUCTION, Education and development are closely related as education provides inputs for economic. growth among which knowledge is an important one Modern economic growth as seen in. recent years is driven by knowledge for which knowledge creation and utilization acquires. significance Development of knowledge is based on the quantity and quality of education. system available particularly of higher education in a country Therefore higher education. assumes significance as creator and supplier of knowledge Access to and availability of. higher education is crucial for creation spread and application of knowledge for. development Importance of higher education can be understood from its functions like i. creation and dissemination of knowledge ii supply of manpower particularly knowledge. workers iii attitudinal changes for modernization and social transformation iv formation. of strong nation state and v promotion of higher quality individual and social life GoI. 2005 Hence development of higher education becomes significance. Development of higher education depends on various factors among which finance plays a. major role Financing higher education has attracted serious attention of policy makers and. educational thinkers as higher education system is facing financial crunch Varghese 2009. Rani 2009 GoI 2005 in recent years Alternative ways of financing higher education are. being explored and implemented to overcome the problem of deficit finance and cost. recovery Among them educational loan is increasingly seen as an important source of. finance It is necessary to note that education loan has become a way transferring financial. burden from government to consumers of higher education In this background an analysis of. pattern of educational loan or student loan is necessary to understand the existing scenario. Studies which have analyzed educational and student loans are few in number Narayana. 2005 The present paper attempts to fill this gap by examining the pattern of student loans. Before analyzing the educational loan pattern an overview of present higher education. Paper presented in the Workshop on Balancing Banking and Social Responsibility at CMDR Dharwad 08 06 2010. Monograph 61 Page 4, Financing Higher Education A Study of Educational Loans.
system finances of higher education and problems have been examined followed by an. analysis of educational loan by public sector banks and selected commercial banks has been. carried out,2 Status of higher education, An analysis of growth in number of educational institutions access to higher education. institutions and enrolment of students provides a view of status of higher education which. are discussed in this section,2 1 Growth of higher education. Recognizing the need the Indian Government gave significant attention to higher education. system and as a result a huge higher education system has been developed As shown in in. Table 1 the number of colleges increased from 496 in 1947 48 to 25951 in 2009 10 while the. number of universities grown from mere 20 to 504 during the same period Similarly the. enrolment of students for higher education has seen tremendous increase over the period. During 1947 48 only 2 lakh students had enrolled for higher education which increased to. 136 lakh in 2009 10 which indicates the rapid growth and increasing demand for higher. education in India,Table 1 Growth of Higher Education in India. Year Colleges Universities Enrolment in 10,1947 48 496 20 0 2. 1950 51 578 28 0 2,1960 61 1819 45 0 6,1970 71 3277 93 2.
1980 81 4577 123 2 8,1990 91 6627 184 4 4,2001 02 11146 272 8 8. 2002 03 15343 300 9 3,2006 07 18064 369 11 08,2008 09 22064 471 12 37. 2009 10 25951 504 13 6,Source GoI 2005,GoI 2010 Annual Report Department of Education. Monograph 61 Page 5, Financing Higher Education A Study of Educational Loans. Technology is a key input in production and development process hence creation and spread. of technical knowledge assumes significance India has not failed in giving adequate attention. to this area as revealed by the increase in number of technical institutions Table 2. Table 2 Number of Technical Institutions,1 Indian Institute of Managements 6.
2 Engineering Technology and Architecture,Colleges 978. 3 Medical colleges 759,4 Teacher Training Institutions 873. Total 2616,Source GoI 2005,GoI 2010 Annual Report Department of Education. 2 2 Equity in higher education, Educational contribution to social economic and political development of a region is well. recognized Human capital particularly with higher education increases labour productivity. and individuals income and that of the economy Hence it is necessary to develop an. education system which generates human capital for achieving social and economic. development However in the process of developing education system some sections of the. society might be left out for various reasons like non affordability lack of accessibility etc. This creates inequity in growth of human capital and adversely impacts on development. Therefore issue of equity in terms of enrolment ratio of students and disparity in enrolment. in higher education assumes significance in understanding the educational system. Enrolment ratio of students indicates the extent of higher education that has reached people. Thorat 2006 There are three alternative measures that indicate the reach of higher. education 1 Gross enrolment ratio GER 2 Net enrolment ratio NER and 3. Enrolment of eligible ratio EER Thorat 2006 GER indicates access level by taking ratio. of persons in all age group enrolled in various programs to total population in age group 18. 23 while NER measures level of enrolment for age specific groups namely those in age. group of 18 23 EER depicts level of enrolment of those who completed higher secondary. level education,Monograph 61 Page 6, Financing Higher Education A Study of Educational Loans.
The enrolment of students for higher education has increased over the years In 2009 10 over. 136 lakh students had enrolled for higher education in the country The state wise scenario of. total enrolment and women enrolment to higher education is presented in Table 3 for the year. 2004 05 It is interesting to note that enrolment by women is less than the national share of. 39 4 per cent in large number of states Even in states like Maharashtra Andhra Pradesh. West Bengal and Uttar Pradesh women enrolment is less than. Table 3 State wise student enrolment for higher education 2004 05. Sl Total Women enrolment to,No enrolment enrolment total. 1 Kerala 3 13 155 1 84 170 58 81,2 Goa 21 643 12 569 58 08. 3 Nicobar 2 706 1 479 54 66,4 Daman Diu 619 325 52 5. 5 Punjab 2 79 707 1 43 422 51 28,6 Pondicherry 20 199 10 326 51 12. 7 Chandigarh 51 309 25 329 49 37,8 Delhi 7 09 169 3 42 469 48 29.
9 Uttaranchal 1 31 742 62 447 47 4,10 Himachal Pradesh 1 03 628 48 813 47 1. 11 Tamil Nadu 8 09 366 3 79 493 46 89,12 Meghalaya 30 716 14 284 46 5. 13 Jammu Kashmir 80 405 36 327 45 18,14 Manipur 38 679 17 422 45 04. 15 Nagaland 13 644 6 139 44 99,16 Karnataka 7 06 241 3 13 202 44 35. 17 Haryana 2 64 331 1 13 939 43 1,18 Gujarat 6 45 689 2 74 198 42 47.
19 Tripura 22 447 9 491 42 28,20 Assam 2 14 342 88 732 41 4. 21 Sikkim 6 596 2 711 41 1,22 Uttar Pradesh 15 07 991 5 81 460 38 56. 23 Maharashtra 15 34 613 5 77 892 37 66,24 Andhra Pradesh 10 56 719 3 97 103 37 58. 25 Arunachal Pradesh 6 745 2 519 37 35,26 West Bengal 7 46 509 2 76 298 37 01. 27 Chhattisgarh 1 63 254 60 028 36 77,28 Jharkhand 2 09 176 76 559 36 6.
29 Mizoram 12 180 4 325 35 51,30 Rajasthan 3 94 478 1 31 986 33 46. 31 Madhya Pradesh 7 58 418 2 37 364 31 3,32 Bihar 5 53 693 1 35 423 24 46. 33 Orissa 3 67 187 73 332 19 97,34 D N Haveli 0 0 0. 35 Lakshadweep 0 0 0,Total 1 17 77 296 46 41 576 39 41. Source Government of India Annual Report 2006 07,URL www education nic in AR AR0607 en pdf.
Monograph 61 Page 7, Financing Higher Education A Study of Educational Loans. the national ratio This issue needs to be addressed by increasing the number of women. enrolling for higher education State wise GER for the year 2002 03 Table 4 indicates that. the number of people attending higher education is very less as GER at all India level is. around 9 per cent The state wise picture reveals that Goa recorded a higher GER followed. by Manipur Himachal Pradesh Maharashtra Uttaranchal and others But in states like. Nagaland Jammu Kashmir Tripura and others the GER is very low This lower. participation in higher education results in lower human capital formation. Table 4 Gross Enrolment Ratio in Higher Education 2002 03 in percent. States with above States with below national level. national level GER GER GER GER,1 Goa 13 47 1 Rajasthan 8 77. 2 Manipur 13 19 2 Orissa 8 71,3 Himachal Pradesh 12 76 3 Assam 8 67. 4 Maharashtra 12 30 4 Punjab 8 53,5 Uttaranchal 12 25 5 West Bengal 8 21. 6 Meghalaya 10 94 6 Jharkhand 8 12,7 Tamil Nadu 10 91 7 Madhya Pradesh 7 77.
8 Haryana 10 56 8 Kerala 7 66,9 Karnataka 9 92 9 Bihar 7 30. 10 Gujarat 9 65 10 Chattisgarh 7 27,11 Andhra Pradesh 9 51 11 Uttar Pradesh 7 03. 12 Mizoram 9 51 12 Arunchal Pradesh 6 37,13 Sikkim 6 29. 14 Tripura 5 84,15 Jammu Kashmir 4 95,16 Nagaland 4 33. All States 8 97,Source GoI 2005, Besides total GER it is necessary to examine GER across gender and social categories to.
know equity in higher education in a deeper perspective There is a wide difference in GER. across gender and social categories Table 5 as per results from three different sources of. GER 1 Selected Educational Statistics SES 2 Census and 3 NSS According to SES. GER is 9 7 per cent during 2006 07 while estimation by Census and NSS show it over 13 per. cent The SES under estimates enrolment rates because of the under reporting of enrolment in. unrecognized institutions and also due to non reporting of enrolment data on an annual basis. by some of the State governments Thorat 2006 Extrapolations are used to fill the gaps. Monograph 61 Page 8, Financing Higher Education A Study of Educational Loans. arising from non reporting by some states The problem with the NSS and also Census data is. that as it is collected from households and it is likely to over estimate the student enrolment. in colleges and universities as it might include those who are doing diploma or training. programmes e g computer training in unrecognized institutions also A further problem. with the population Census data is that it does not distinguish between enrolment in. professional degree and diploma programmes Thorat 2006. GER by gender indicates that female enrolment is low as shown by all the sources Table 5. According to Census while 17 per cent of men are pursuing higher education it is over 10 per. cent for females The NSSO estimation on GER of social categories presented in the table. reveals that SCs 5 per cent and STs 7 5 per cent are still lagging in joining higher. education The rural urban GER also presents disparity in enrolment for higher education. where over 27 per cent of urban youth are joining for higher education it is nearly 8 per cent. for rural youth according to Census data Other measures of equity in higher education i e. NER and EER estimated by NSSO illustrate that NER is over 13 per cent at all India level. while EER is over 59 per cent The NER also shows disparity in the extent of higher. education across gender and social categories, Table 5 Enrolment Ratio for Population Sub groups in. Financing Higher Education A Study of Educational Loans Monograph 61 Page 1 CMDR Monograph Series No 61 FINANCING HIGHER EDUCATION A STUDY OF EDUCATIONAL LOANS Dr S Puttaswamaiah CENTRE FOR MULTI DISCIPLINARY DEVELOPMENT RESEARCH Dr B R Ambedkar nagar Near Yalakkishetter Colony Dharwad 580 004 Karnataka India Phone 0836 2460453 2460472 Website www cmdr ac in

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