Bombay : Thousands of Indian students fleeing war-torn Ukraine now face an unprecedented financial burden as the chances of their colleges reopening soon look bleak, but they still struggle with expensive loans they have contracted to finance their studies.
The bankers said they were assessing the impact of this crisis and that it was possible to extend the terms of these borrowers on a case-by-case basis, although there was no discussion about this at the Association. Indian banks (IBA). According to the standardized IBA format, student loans up to ₹4 lakh do not need collateral but loans up to ₹7.5 lakh can be obtained with collateral in the form of a suitable third party guarantee. Loans for studies above ₹7.5 lakh require tangible collateral and in any case co-obligation of parents is necessary. The bankers said that while there is a possibility of future defaults if these students cannot complete their courses and find jobs, the guarantee would strengthen the recovery.
“We are evaluating our exposure to students in Ukraine. Since these loans are disbursed in installments, the impact will also depend on when they can continue the rest of their studies,” said a private sector banker on condition of anonymity.
Banks have outstanding student loans ₹63,057 crore in January, down 2.4% from a year earlier, RBI data showed. However, a breakdown of the share of these expenditures intended for students abroad was not available.
The brother of a student stuck in Ukraine alongside other Indian students told Mint he plans to discuss the matter with lenders. Aman Mishra said his family took a ₹Loan of 45 lakh for his sister’s education from State Bank of India (SBI). “Every year we have to show receipts to the bank for the loan. My sister is in her second year of medical school and we took out a five-year loan. Right now the goal is to get her back,” Mishra said. On March 4, her sister was in Poland and is expected to return to Gorakhpur in the next few days.
Mint reported on March 1 that Ukraine is a popular destination among Indian students pursuing medical and engineering studies. There were 19,000 Indian students in Ukraine before the evacuations began, according to university admissions platform LeverageEdu. According to LeverageEdu, students mainly choose Ukraine because these courses are significantly cheaper than a private college in India.
The fees for an MBBS degree in Ukraine are ₹15-20 lakh against ₹80 lakh – ₹1 crore here. True, experts said that some parents finance the education of children out of pocket. Also, although not required, students are encouraged to purchase student loan insurance.
“Most of those who have taken out loans also opt for insurance,” said Akshay Chaturvedi, Founder and Managing Director of LeverageEdu. Chaturvedi said that the focus should be on the future of these students and that it would be helpful if universities in other countries agreed “Banks should give some relief, and it is doubtful that they will claim dues account given the circumstances,” he said.
Meanwhile, expressing concern over the future of medical students who returned from Ukraine, the Indian Medical Association has recommended that they be admitted to Indian medical colleges as a one-off measure, PTI reported. March 4.
K. Srinivasan, head of the public awareness institution’s education loan task force, said banks have never been keen on sanctioning loans to students traveling to countries like the United States. Russia and Ukraine. “Lenders prefer popular Western countries because they offer a kind of assurance that students would be easily employable later,” Srinivasan said.
Never miss a story! Stay connected and informed with Mint. Download our app now!!
Comments are closed.