Depreciation of the rupee and high interest rates seem to be hurting students the most. Latest RBI data, on borrowing trends for individuals and households, show that education loans have been showing a declining growth over the years. However, loans taken for buying consumer durables have shot up in a big way.
The growth in education loans dropped from a high of 36.5 per cent in 2008-09 to 9 per cent as of June-end. At the end of December 2013, public sector banks had over 25 lakh student loan accounts and the amount outstanding was Rs. 57,700 crore. Growth of education loans has slowed despite the UPA government’s interest subsidy scheme for students, rolled out in the 2009-10 Budget.
Over the same five-year period from 2008-09, the growth in loans for consumer durables has gone from a shrinking minus-15 per cent to a whopping 55 per cent rise. The trend may not necessarily suggest that there is a rapidly growing market for consumer durables.
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