Banks offer Exorbitant Interest Rates on Student Loan
Students face double nightmare. There has been a hike in the University fee and the banks have increased the interest rates exorbitantly.
“Universities opine that the old fee does not help them to run the courses and meet the basic expenditure. They say that the cost to maintain the infrastructure has to be realised from the fee. Hence they have revised the existing fee.”
On the other hand Banks feel that the interest rate on loans is considerably low.
Universities consider the current interest rates to be too generous for the students belonging to high income groups.
Universities also suggest that an interest rate of 3 to 4% and a revised tuition fee would help them generate an additional income. This income would be spent on developing the facilities for students. A part of the same would be used for a revision in the staff salary too as they deserve it the most.
“Government’s adviser on Higher Education, Lord Browne is likely to present a report on university funding. Hence he is coming up with all these revisions.”
He seems to be considerate enough. He suggests having different interest rates for different category of students. Probably the graduates with high income will pay the revised interest rate and those with low income will pay the cheaper rate.
Another option for the well to do graduates might be to go on paying their students loan for a year or more than that after the sum they originally loaned from the bank has been paid back.
Middle Class graduates in their 20s and 30s will have to keep laboring to clear their debts.
Graduates also have the option of repaying their loans up to as long as 20 years.
Under the present system male students can pay the loan for 13 years and their female counterparts can pay the same for 17 years.
Government is supporting all the moves to increase the interest rates and University fee looking at the low budget availability for the universities.
Lord Browne is trying his level best to strike a balance between realisation of more interest rates from the affluent students and he is trying to ensure that the poorest ones are not deprived of receiving quality education they deserve. The effort is to ensure right kind of education to all the cross sections, yet the students have to face the brunt of the hike.
Given the Current Economic Scenario, such interest has become a major burden, Any Suggestions by readers to reduce this burden are welcome