New Delhi: A parliamentary panel has flagged a decline in the number of active student loan accounts amid a sharp rise in outstanding amounts, and emphasised the need for urgent measures to improve loan accessibility.
In its report titled—Review of Schemes for Education Loan and Financial Accessibility in
Higher Education—the Standing Committee on Education, Women, Children, Youth and Sports recommended the government take urgent measures to ensure educational loans reach the maximum number of students.
The report was presented in Parliament Tuesday.
The committee, chaired by Congress Rajya Sabha MP Digvijay Singh, noted that the number of active student loan accounts fell from 23.36 lakh in 2014 to 20.63 lakh in 2025.
“The overall quantum of credit outstanding under education loans has seen a notable upward trend over the last eleven financial years… In the last three years alone, the outstanding amount increased from Rs 99,086 crore in 2023 to Rs 1,37,474 crore in
2025. The data indicates a sustained and sharp rise in the education loan portfolio in recent years,” the report notes.
The Committee said that it was informed by RBI representatives that while the number of accounts has fluctuated slightly—dropping from 23.36 lakh in 2014 to 20.63 lakh in 2025—the total credit amount has increased, suggesting larger ticket sizes or higher borrowing per student. “This increase may reflect rising costs of education, both domestic and abroad.”
“The Committee expresses its concerns over these figures since it suggests that the accessibility of educational loans is declining over time, even as educational costs have risen rapidly,” it states.
The Committee, therefore, recommended the Department of Higher Education and Department of Financial Services take sincere efforts to ensure educational loans to maximum number of students of the country, “and all families Below Poverty Line (BPL) should be accorded priority in sanctioning of educational loans for higher education.”
The Committee observed that while the Union Ministry of Education has publicised government schemes like the PM Vidyalaxmi Scheme through print, radio, social media, and camps at IITs, IIMs, NITs, IIITs, and other institutions, many students from rural and disadvantaged backgrounds remain unaware of these loans.
The scheme, approved last year, provides financial support to meritorious students for higher education at 860 top institutions in India, benefiting over 22 lakh students annually.
The Committee recommended expanding outreach to schools, using regional languages, and ensuring that every institution has loan facilitation centres and trained counsellors to guide students in accessing these education loans.
The House panel observed that the moratorium period under government education loan schemes is currently limited to the study period plus one year. However, the Committee noted that many graduates are unable to secure employment within a year after completing their courses.
“In view of the difficulties that graduates often face in getting jobs, the Committee recommends that the moratorium period for the repayment of student loans should be extended to two years after course completion,” it states.
The Committee noted that the Credit Guarantee Fund Scheme for Education Loans (CGFSEL), a government-backed scheme that provides banks a safety net against defaults to encourage lending to students without collateral, was introduced in September 2015 and provides a 75 percent guarantee for education loans up to Rs 7.5 lakh.
However, the committee recommended that due to rising education costs, the guarantee cover under CGFSEL be enhanced to Rs 20 lakh to ensure greater access to higher education loans for students.
Delay in disbursal under PM-Vidyalaxmi
The House panel further observed significant gaps in the implementation of the PM Vidyalaxmi scheme. It said that between February and August 2025, while 55,887 applications were received and Rs 4,427 crore was sanctioned, only 21,967 loans were disbursed, totalling Rs 688.27 crore.
“Around 15% of the sanctioned amount has actually been disbursed, reflecting that many students are not receiving the financial support intended for them,” the Committee noted.
Highlighting further issues, the panel pointed out that several banks had not sanctioned even a single loan during the period, reflecting a “callous approach towards poor students”.
The committee recommended that the Department of Higher Education, Department of Financial Services, Reserve Bank of India (RBI), and the National Bank for Agriculture and Rural Development (NABARD) issue strict and uniform guidelines governing the sanctioning, rejection, and pending status of education loan applications.
The panel emphasised that such measures are essential to prevent undue delays and ensure equitable access to financial support for students.
The committee emphasised that income-based criteria often create hurdles for students. “Ration cards of parents should be the primary eligibility criterion, with at least 20% of loans reserved for this segment, and the Government standing as guarantor,” it recommended, ensuring equitable access for disadvantaged students.
(Edited by Ajeet Tiwari)
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