Why India without quality, inclusive higher edn has reasons to worry

Quality, affordable and inclusive higher education remains an area of concern in India even after so many decades of Independence and the concerted efforts made in this regard by successive Central and state governments during these years. Higher education not only drives innovation, economic development, and social mobility but also helps in bridging the gap between diverse communities and empowering individuals with skills needed for an evolving job market. Without affordable quality facilities, many capable students, especially from economically disadvantaged backgrounds, miss out on educational opportunities, deepening inequality and stalling social progress. A lack of inclusivity also excludes marginalized communities, reducing diverse perspectives that enrich learning environments. Ensuring that higher education is both accessible and of high quality is essential for a nation to build a knowledgeable workforce, maintain global competitiveness, and create a society that offers equal opportunities for all.

It was, therefore, heartening indeed when the Union Cabinet on November 6, 2024 approved the PM Vidyalaxmi, a new central sector scheme that seeks to provide financial support to meritorious students so that monetary constraints do not prevent anyone from pursuing higher studies. Under the PM Vidyalaxmi scheme, any student who gets admission in Quality Higher Education Institution (QHEIs) will be eligible to get collateral free, guarantor free loans from banks and financial institutions to cover the full amount of tuition fees and other expenses related to the course. It has been promised that the scheme will be administered through a simple, transparent and student-friendly system that will be inter-operable and entirely digital. To begin with, 860 qualifying QHEIs, covering more than 22 lakh students will be able to potentially avail benefits of PM Vidyalaxmi, if they so desire.

An official statement, issued after the Cabinet meeting, said that for loan amounts up to Rs 7.5 lakh, the student will also be eligible for a credit guarantee of 75 per cent of outstanding default. For students having an annual family income of up to Rs 8 lakh, and not eligible for benefits under any other government scholarship or interest subvention schemes, 3 per cent interest subvention for loan up to Rs 10 lakh will also be provided during moratorium period. The interest subvention support will be given to one lakh students every year. Preference will be given to the students who are from government institutions and have opted for technical or professional courses. An outlay of Rs 3,600 crore has been made during 2024-25 to 2030-31, and 7 lakh fresh students are expected to get the benefit of this interest subvention during the period.

I have no reason not to welcome the PM Vidyalaxmi scheme, coming at a time when we are struggling hard to make affordable quality higher education accessible to all. However, my worry lies elsewhere. I don’t know how many students from weaker sections of society such as SCs, STs and OBCs will be able to make the most of this scheme if their family’s annual income is up to Rs 8 lakh. If fees are lower and affordable for them, then the education loan will certainly be of great help. It will, however, also depend a lot upon their abilities to pay back the loans. As a result, education loan has not yet become a popular financial tool to boost higher education dreams of students coming from humble economic backgrounds in a country of nearly 150 crore people where the gross enrolment ratio (GER) in higher education remains as low as 30 per cent.

I would also like to refer here to a written reply made by Shiv Pratap Shukla, then Minister of State for Finance to a question in the Lok Sabha on August 3, 2018 where he stated that “Vidya Lakshmi Portal was launched by the Government on August 15, 2015 to ensure that students can avail loans easily through single window system of banks for education loans. Banks follow Indian Banks’ Association (IBA) guidelines in this regard which stipulates that education loan applications have to be disposed of in the normal course, within a period of 15 to 30 days.” He said that as per National Securities Depository Limited (NSDL), as on 29.7.2018, a total of 144390 applications were received out of which 42733 applications were sanctioned and 26392 applications were rejected or closed. He further stated in his reply that as reported by NSDL, 22119 applications were pending as on 29.7.2018 for more than six months.

I won’t say that the figure of 42733 is discouraging but is certainly not in sync with the magnitude of the challenge. The projected figure of 22 lakh to benefit from PM Vidyalaxmi scheme is on the lower side but would be more disappointing if 70 per cent beneficiaries do not turn out to be from weaker sections of society as the GER among them in higher education is much lower and abysmally disproportionate to their population. The need of the hour, therefore, is to make our higher education ecosystem more affordable and inclusive. Overy the years, studying in higher education institutions (HEIs) is becoming costlier but people’s income has not increased accordingly. Tuition fees in Central government institutions such as IITs, IIMs, NIDs, medical and engineering colleges in the private sector are still non-affordable for the majority of SC, ST, OBC and EWS students. We need to get out of this situation sooner the better.

The Central and State governments must devise a mechanism to further increase spending on higher education irrespective of streams. It will have transformative benefits not only for individuals but for society at large. By raising the educational standards and GER, more young people from economically disadvantaged backgrounds will escape the cycle of poverty, leading to an increase in the middle-class population and a decrease in economic inequality. Studies indicate that each additional year of schooling can significantly enhance income potential, which ultimately uplifts entire communities. Moreover, increased investment in higher education can create a more skilled workforce, which is essential for a country like India aiming to establish itself as a global hub for technology, research, and manufacturing. Lastly, when marginalized communities are encouraged to pursue higher education, it creates a more equitable society, where everyone has the opportunity to contribute meaningfully to national progress. The resulting benefits in social cohesion, health outcomes, and reduced crime rates add up to substantial, long-term savings for the government, proving that investments in higher education are cost-effective.