The government is preparing a campaign across the country to speed up the process of giving education loans. Its objective is to almost double the distribution of education loans by next year, for which faster approval, campus access and easy loan rules will be adopted. The Education Ministry is working on a roadmap in collaboration with the Finance Ministry. It involves state education departments, state-level bankers’ committees (SLBCs) and higher education institutions to improve access to education finance. Banks had distributed education loans worth about Rs 39,000 crore in the financial year 2026. Whereas in the financial year 2025 this figure was Rs 40,253 crore.
camps will be organized
A government official with knowledge of the matter said in an ET report that banks will set up camps in about 50,000 higher higher education institutions so that loans can be sanctioned on the spot. He said that banks have been instructed to reduce the time for loan approval process to 10 days, that is, to finalize the loan approval within this deadline. A senior official of the bank said in a media report that about 1,000 institutions have already been identified, where students are being provided the facility of loan approval on the spot. The official said that in some cases we are also waiving all other types of fees. More than 3,80,000 education loan applications were approved in FY 2026.
Which bank gave how much education loan for financial year 2026?
|
bank |
loan amount (in crore rupees) |
|
SBI |
13,370 |
|
Canara |
4,306 |
|
UBI |
4,274 |
|
ICICI Bank |
3,775 |
|
BOB |
2,871 |
Also considered to increase credit guarantee cover
The government is also considering increasing the credit guarantee cover for collateral-free education loans. With this step, banks will be able to give loans beyond the existing limit of Rs 7.5 lakh without guarantee. The interest rates under this scheme are limited to the bank’s externally benchmarked lending rate plus 50 basis points. The official quoted earlier said that we are also considering eliminating the need for co-applicant for those loans which get guarantee cover.
CGFSEL Coverage
Currently, the ‘Credit Guarantee Fund Scheme for Education Loans’ (CGFSEL), run by the National Credit Guarantee Trustee Company, covers 75 per cent of loans up to Rs 7.5 lakh under eligible schemes, including the Model Education Loan Scheme. In December 2025, a standing committee of Parliament had recommended increasing the CGFSEL guarantee cover to Rs 20 lakh in view of the rising cost of education, increase in fees and the increasing need for unsecured loans. On Tuesday, Finance Minister Nirmala Sitharaman told the Lok Sabha that Rs 3,600 crore will be spent on interest subsidy for the period 2024-25 to 2030-31 under the Pradhan Mantri Vidyalakshmi Yojana (PMVLS).
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