If you are an arts student trying to get an education loan, chances of getting an approval would appear remote. Banks typically prefer to finance students interested in engineering, MBA and technology.
So is there no room for grooming of the philosophical thinker and the proverbial economist?
Many banks admit that students opting for a plain vanilla bachelor/masters in arts are a strict no-no given the dearth of employment avenues.
Says an officer at Punjab National Bank, "What is the surety of employment of a student after a BA or even an MA for that matter? Look at how many arts graduates are unemployed vis-a-vis engineering graduates. Therefore, we prefer students who go for technical or professional courses."
"But suppose an arts student has obtained admission in Harvard then we will definitely finance him/her," he added. Basically an arts student has to have an exceptional marks and an admission offer to a very prestigious institution for him/her to be eligible for a loan.
In the case of arts students, banks look at the course the student proposes to pursue, the institution, the alumni of the institution and the possibility of a handsome salary on completion of the course.
Most banks give arts students loans on a discretionary basis. Bankers insist that the interest rate, margin and security are the same irrespective of the area of study with a loan up to 4 lakh coming at an interest rate of anything between 10.50 per cent and 13 per cent.
Some banks such as Bank of Baroda may also look at the profile of the students' parents. "If the parents have given the bank a lot of business in terms of loans or deposits, the branch manager may give decide to sanction the loan."
Arts students in the domestic market have it easier though since a few banks such as BoB finances this category of students under its 'Baroda Gyan' scheme.
Foreign bank HSBC insists that it does not turn down students based on the area of study but it has list of universities that it would finance. The list contains 300 universities abroad and over 100 in India.
It also runs a scholarship for students wishing to study in esoteric areas such as urban architecture, specialised area of economics, tropical medicine, etc. It is currently financing six scholars in the United Kingdom.