Student loans in financing higher education in India

Confronted with declining public budgets for education on the one hand, and the need for more resources on the other, many developing countries such as India, have been examining alternative methods of financing higher education. One such mechanism is student loans. A student loan programme is not a new phenomenon in India. The National Loans Scholarship Scheme has been in operation since 1963. This article critically reviews the experience of implementation of the National Loan Scholarship scheme. It examines strengths and weaknesses and problems specific to this programme in India, with a view to identifying measures for marginal improvement in the programme. The conclusion is that at present student loans make little contribution to either the efficiency or equity of higher education in India.