Students fleeing Ukraine beware of loan repayment

Bankers said they are assessing the impact of the crisis and there is a possibility of extension of tenure for such borrowers on a case-by-case basis, though there has been no discussion in the Indian Banks’ Association (IBA). As per the standardized format of IBA, education loan up to 4 lakh does not require collateral, but the loan is . As far as 7.5 lakh can be obtained with collateral in the form of suitable third-party guarantee. up education loan 7.5 lakhs requires solid collateral, and, in all cases, co-obligation of the parents is required. Bankers said there are chances of defaults in the future, which will lead to collateral recovery if these students cannot complete their courses and find employment.

“We are assessing our risk to students in Ukraine. Since these loans are disbursed in installments, the impact will also depend on when they can continue with their remaining education,” said a private sector banker on condition of anonymity.

Banks have outstanding education loans 63,057 crore as of January, down 2.4% from the previous year, RBI data show. However, a breakup of how much this is for foreign students was not available.

The brother of a student stranded in Ukraine along with other Indian students told Mint that he plans to discuss the issue with lenders. Aman Mishra said that his family 45 lakh loan from State Bank of India (SBI) for your sister’s education. “Every year, we have to show the receipt to the bank for the loan. My sister is in her second year of medicine, and we took out a loan for five years. Right now, the focus is on bringing her back,” Mishra said. As of March 4, his sister was in Poland and is expected to return to Gorakhpur in the next few days.

Mint reported on March 1 how Ukraine is a popular destination among Indian students pursuing medical and engineering degrees. According to university admissions platform LeverageEdu, there were 19,000 Indian students in Ukraine before withdrawals began. According to LeverageEdu, students mainly choose Ukraine because these courses are much cheaper than a private college in India.

Fees for MBBS degree in Ukraine is against 15-20 lakhs 80 lakh- 1 crore here. Certainly, experts said that some parents fund their children’s education out of their own pocket. Also, although not mandatory, students are encouraged to purchase insurance against education loans.

Akshay Chaturvedi, Founder and CEO, LeverageEdu, said, “Most of the people who have taken loans also go for insurance.” Chaturvedi said the focus should be on the future of these students, and it would be helpful if universities in other countries accepted them and transferred their study credits. “Banks should be given some relief, and there is a doubt whether they will ask for dues given the circumstances,” he said.

Meanwhile, expressing concern about the future of medical students who returned from Ukraine, the Indian Medical Association has recommended that they be admitted to Indian medical schools as a one-time measure, PTI reported on March 4.

The convener of the Public Awareness Institute Educational Loan Task Force, K. Srinivasan said banks have never been keen on sanctioning loans for students going to countries like Russia and Ukraine. “Lenders prefer popular countries to the West because it comes with some sort of assurance that the students will be easily employable later,” Srinivasan said.