student loans: IIMs want banks to go easy on student loans

New Delhi | Mumbai: India’s business schools want banks to extend student debt repayment schedules by six months or more, beyond the inbuilt moratorium that most lenders offer for these loans. But senior bankers with some state-owned lenders believe students are already being offered adequate moratorium and an extension is not needed.

The Indian Institutes of Management anticipate delays in onboarding of students graduating this year, and don’t rule out problems for the class graduating in 2021 as well. The first instalment for graduates with student loans for the class of 2020 will be due in December.

Most banks have an in-built moratorium clause in their student loans — the extension is usually for six months or one year from the date of completion of the course. IIMs’ two-year courses for the class graduating in 2020 cost between ₹9 lakh and ₹22 lakh.

Speaking off record, senior officials from some public sector banks said that already enough moratorium is being offered to students and a further extension is not required.


Some IIMs, like the one in Indore, have formally started the process of seeking further extension. Other IIMs, like the ones in Ahmedabad, Kozhikode, Lucknow and Raipur, are likely to intervene in case the hiring process gets delayed.

‘Will Intervene If Needed’

“Tough times call for all of us to come together and mitigate the stress of those in need… It would be great; therefore, if you can defer the repayment schedule of the study loans of our students by six months beyond the moratorium you already allow,” IIM-Indore director Himanshu Rai wrote in a letter to bank chairpersons.

Rai has approached State Bank of India, Punjab National Bank, Union Bank of India and Central Bank. He said one bank has responded positively, but didn’t name the lender.

“When we give an education loan, there is a one-year extended moratorium period. The option is available on all student loans taken for full-time courses,” said Anand Subramanian, business head (educational loans), Bank of Baroda.

IIM-Ahmedabad dean (programmes) Shailesh Gandhi said: “The institute is monitoring joining dates of the students and would respond accordingly.”

IIM-Kozhikode director Debashis Chatterjee told ET the institute will come to know the extent of hardship only after the lockdown ends. “In case students ask for help, we will surely intervene,” he said.

IIM-Raipur director Bharat Bhasker also said the institute will intervene if needed.

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