The Indian Institute of Technology (IIT) in Delhi has urged the government of India to emulate Australia-style income-linked repayment schemes for student loans.
Australia’s Higher Education Loan Programme (HELP) lends students the money to cover their tuition fees, much like a standard loan, but it is the repayment model that differs most.
Repayment of the loan only begins when earnings rise above a fixed threshold making it different from a traditional loan in which the debtor has a fixed repayment regardless of income.
The Indian Express reports that IIT-Delhi has suggested that the HRD Ministry should consider setting up an agency similar to the Higher Education Financing Agency (HEFA), ‘for directly funding students with full or partial tuition fee[s] based on their needs and put in a process to recover as additional tax/cess once he/she gets employed.’
HEFA is an agency that extends ten-year loans to government educational institutions for infrastructure development.
The proposal states that: “It is important for IITs that our graduates do not always choose high-paying jobs but follow their passion in other fields, including research and public service.
“Very high loan as a burden eliminates career choices as can be seen even today from the IIM type loan based education.”
The scheme would help IITs become financially autonomous
The cost for an IIT to educate one undergraduate per year is Rs 6 lakh (about £6800); students pay just a third, or Rs 2 lakh, per year in tuition fees.
The proposal by IIT Delhi on student loans, if accepted, would mean that IITs would be able to charge tuition fees based on the actual cost of the education and hence become financially autonomous.
An IIT Delhi official said: “The institutes will no longer depend on government grants.”
Earlier this summer, in a bid to add to its revenue stream, IIT Delhi revealed that it was hoping to entice 500 foreign students to the institute by 2024.
Hari is the Managing Editor of Global Education Times. Hari has clocked nearly a decade working as a communications professional with a focus on the education sector. He has also had stints in journalism and advertising in a career which has seen him live, study, and work, in three countries.
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