Parliamentary Panel Raises Concerns Over Education Loans, Recommends Reforms Including Student Grievance Portal

The Parliamentary Standing Committee has expressed concern over the challenges faced by students in obtaining education loans and has recommended reforms to make the process more transparent and efficient. The panel highlighted the indifference of banks in approving loan applications and suggested strict guidelines to streamline the approval process.

The 372nd report of the committee, presented in Parliament on Tuesday, pointed out that several banks did not approve a single application under the PM Vidyalakshmi Scheme between 25 February 2025 and 31 August 2025. The report emphasized the urgent need to resolve these issues to ensure that students have timely access to funds for higher education.

Key Recommendations by the Committee

1. Uniform Guidelines for Loan Approval:
The panel recommended that the Ministry of Education, Department of Financial Services, and the Reserve Bank of India (RBI) issue strict and common guidelines regarding loan approval, rejection, and pending applications. The committee emphasized that decisions should not be delayed and approval rates under the PM Vidyalakshmi Scheme should improve.

2. Monitoring and Nodal Officers:
To track education loan applications, a district-wise monitoring dashboard should be made mandatory. Every bank branch should have a designated nodal officer to assist students, provide technical support for applications, and ensure smooth processing. Nodal officers must be clearly identified and trained to provide proper guidance.

3. Student Grievance Portal:
The panel recommended establishing a centralized student grievance portal for education loans, integrated with the RBI Ombudsman platform and helpline services. Time limits for grievance resolution should be defined to ensure timely redressal of student complaints.

4. Wider Accessibility:
The committee suggested that education loans under the PM Vidyalakshmi Scheme, currently restricted to students ranked up to 902 in the ranking system, should also be available to students from other institutions. Information about education loans must reach all students, including those in remote areas, through social media and awareness campaigns.

5. Fair Treatment of Applicants:
The panel recommended that the Department of Financial Services and RBI ensure audits by an independent agency to prevent discrimination against applicants. Responsibilities must be clearly defined to guarantee transparency and fairness.

The parliamentary committee, chaired by Congress MP Digvijay Singh, stressed that these reforms are crucial to provide students with timely access to financial support for higher education and to ensure equity in the loan process.