1. Why interest-free loans for IIT-ians is good

Why interest-free loans for IIT-ians is good

Interest-free loans for IIT-ians a good step

By: | Updated: July 18, 2016 7:06 AM
IIT entrance news Given scholarships in India offer a pittance and are often discriminatory to boot—in the sense that they are targetted towards specific groups rather than being available to all—the HRD ministry must be lauded for letting merit and means be the sole basis for this scheme rather than pinning it to caste or domicile status.(PTI)

The HRD ministry’s plan to give interest-free loans to those with household incomes less than Rs 9 lakh per annum upon qualifying for enrolment at the IITs is a move that could help India meaningfully realise a part of its demographic dividend. The proposal follows the ministry’s decision earlier this year to hike fees from R90,000 per annum to R2 lakh, starting 2017. While the fee hike moves the public-funded institutes closer towards meeting the actual costs of educating students by themselves, it is true that students from economically weaker sections are going to find the hike a significant impediment to their aspirations of a high-quality education. While the fee-hike had been offset earlier with a full exemption from tuition charges for SC/ST and physically handicapped students—there was also a interest-subvention scheme, Vidya Lakshmi, for those whose family income was less than R4.5 lakh per annum—the government has done well to ease the financial burden of an IIT education for a larger group.

In a country where, as per the All India Survey on Higher Education 2014, just under a fourth of university-age population are enrolled in varsities and colleges, letting meritorious students from limited economic means fall through the funding gaps or being burdened by concerns over financing their education would be criminal waste of the country’s human potential. Given scholarships in India offer a pittance and are often discriminatory to boot—in the sense that they are targetted towards specific groups rather than being available to all—the HRD ministry must be lauded for letting merit and means be the sole basis for this scheme rather than pinning it to caste or domicile status. However, in a country of 141 million in the 18-23 year age group, the government’s efforts can only have that much impact. Premier institutes and universities would be better served—as would be future students enrolling in them—if the alumni gave back, as they do in the West, through contributions and endowments. For instance, between 2008-2011, over 60% of Princeton alumni made contributions to the university. This would allow the IITs or the IIMs to set up their own corpus funds which could be used to subsidise students from economically weaker sections.

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