Panaji, February 21: Student debt should not go the way of the farmer debt crisis in India and the student loan facility needs holistic changes, Reserve Bank of India (RBI) Governor Raghuram Rajan said Friday.
Speaking during an ongoing lecture series here, Rajan also said that the NPA (non-performing assets) vis-a-vis student loans was on the higher side and added that the Aadhar card could be used to track down loanee students.
"How do we ensure that kids when they go to college, pay for an education which is worthwhile, rather than (they) are forced to pay enormous amounts for education which is not going to help them stand on their feet," Rajan said.
He said this when a student, during an interaction, asked him regarding the difficulties in availing a student loan.
"How do we ensure more information in the system so that people can make good decisions, so we don't create something similar to the farmer debt problem, we create student debt problem in the country.
"We don't want to go there," Rajan said, adding that in the West, especially in the US, student debt was emerging as a major issue. Rajan also said that the level of non-performing assets accumulation in the student loan bracket in the country was "much higher than one could think".
"There are ways we can think about how we can incentivise... We need to think of a better student loan repayment scheme. A scheme that first tracks students so that they can't run away.
"I think Aadhar provides that possibility of tracking," the RBI governor said, adding that loans should also be insured so that in genuine cases a student, unable to pay back the loan, can get relief.