(GRE Success! ) Fearing defaults, banks go slow on education loans

Hello All,

I came across this article on the Indian Express:

http://www.indianexpress.com/news/fearing-defaults-banks-go-slow-on-education-loans/1153055/1


This article talks about big numbers and claims that students disappear off the radar. I think it is ridiculous since I have always found students behaving responsibly and repay the loan. Banks also harass you if you miss a month's payment on time. 

In general, bank managers who are approaching their retirement refuse to sanction loans to students. If a student defaults on a loan, the bank penalizes the manager by freezing his retirement benefits and hence managers do not prefer to take that risk. 

There has always been a hostile environment when it comes to student loans and private institutions like Credila do not fair better than their nationalized counterparts. I had a loan interview and the person asked me: "Why did you choose Carnegie Mellon while there are better schools that are cheaper?"

I just find myself irritated to learn that these banks just found another excuse to cover up their incompetency. 

Something to think about before starting your preparation for graduate studies.

Sincerely,
Sai