Government funding bodies like Power Finance Corporation, LIC, the Housing and Urban Development Corporation Ltd and Nabard have expressed inability to fund the Higher Education Funding Agency (HEFA) that has been tasked with providing no-\/low-interest finance to IITs, IIITs, NITs, IISERs, IISc, central schools & Jawahar Navodaya Vidyalayas. HEFA, with a capital base of Rs 10,000 crore (Rs 6,000 crore from the Centre, Rs 600 from Canara Bank and the rest Rs 3,400 crore raised from corporate houses against equity in HEFA), is supposed to mobilise Rs 1 lakh crore by 2022 for infrastructure needs of educational institutions by leveraging funds from the market and supplementing it with CSR funds and donations. While the government\u2019s intention to move away from a grants-model for funding higher educational institutions\u2014though the Centre insists the HEFA will arrange only extra-budgetary funds\u2014sounds ideal, it is perhaps not well-founded. Sure, the institutes HEFA will finance are top-rung ones in India, but low- or zero-interest loans to them shouldn\u2019t seem too attractive to the market. There may have substantive intangible returns, but locking in considerable capital with minuscule or no interest is a risk few financers would be keen on taking. So, HEFA thus must fall back to CSR and donations. A CSR-dependent model\u2014apart from the fundamental flaw that CSR, above a certain ticket size, is compulsory, and thus it is more an unfair impost than any real corporate philanthropy\u2014doesn\u2019t seem too feasible in the long run. Companies often decide on areas to which they will be channelising their CSR money on the basis of the value such activity is likely to return to them. For instance, a tyre-maker is likely to get better returns on CSR spend on HIV\/AIDS awareness for truckers in India than it will from spends on, say, school education. Lukewarm interest from the market seems likelier than not for HEFA, and no amount of CSR and donations can offset that. One alternative before the government is to either keep funding higher education institutes through grants while encouraging them to actively seek donations, preferably from well-placed alumni, and deploy funds thus collected in investment instruments. Many top-notch American universities subsist on alumni contributions. Another is to link the financing to R&D returns, i.e. give financers a piece of the innovation pie at these institutes. The government and HEFA must get creative if the market is to see funding higher education as lucrative.