Budget 2022: Proposal to sanction educational loans without collateral

 The importance of education in enhancing the quality of human resource in particular and the overall welfare of the economy does not have to be overstated. Sometimes the benefits of a good education system may not be reaped in the short term, but nevertheless, an educated work force is at the center of a prosperous economy. 

In this context, it is to be noted that educational loans are not sanctioned without collateral till today which is very unfortunate. Just compare the millions of bucks of corporate defaults to the default rate of educational loans. The credit performance of educational loans is expected to be much better due to the diversification of risk.

Moreover, you don't have to do it for free, educational loans without collateral can be issued at higher interest rates to cover the additional risk. So it is a win-win situation for both the lenders and borrowers. Plus you can maintain centralized databases to avoid willful default. 

All public and private lending institutions should disburse educational loans without collateral without any discrimination!

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