Higher Education Financing in India: Student Loans and Equity in Access

157 Pages·2022·1.732 MB·English

by  Jinusha Panigrahi

Higher Education Financing in India
This book critically examines the questions related to the access to and financing
of higher education in India. The rapid expansion of knowledge economy in the
neo-liberal era of globalisation has created an unprecedented demand for higher
education, especially skill-based advanced learning. However, the inability of the
government to meet the demand for public education, the massification of the higher
education and the rapid privatisation of the education sector have now created
concerns over financing education and ensuring its equitable access.
The volume discusses the challenges faced by aspiring students to meet the rising
cost of higher education, as educational policies increasingly favour marketisation
of higher education. It sheds light on several alternative and innovative methods
of financing, with a focus on educational loans, to highlight how inequities and
inequalities affect access to educational loans in countries like India. The book thus
explores how this impacts students from the deprived/disadvantaged sections of
the society who are unable to access courses and institutions of their choice, and
therefore remain unsuitable to get absorbed in the evolving market economy.
A n incisive read on the economics of education in India, this book will be useful
for scholars and researchers of education, higher education, public policy, sociology,
development studies, political science and governance, as well as for the policy-makers.
J inusha Panigrahi is Assistant Professor in the Centre for Policy Research in Higher
Education at the National Institute of Educational Planning and Administration, New
Delhi, India. She holds a Ph.D. degree in Economics of Education from Jawaharlal
Nehru University, New Delhi. She is the Co-Chair Person (2018–21 and 2021–24)
of the Economics and Finance Education – Special Interest Group, Comparative
International Education Society, United States of America. She has several years
of experience in teaching and research. Jinusha’s research work lies in the areas
of economics of education, financing of higher education, internationalisation,
privatisation and private higher education. She is the co-editor of ‘India Higher
Education Report 2018 on Financing of Higher Education’ (2019) and ‘Financing of
Higher Education: Traditional approaches and Innovative Strategies’ (2022).
Jinusha is the recipient of the prestigious International Visitor Leadership
Program (IVLP) Award by the United States Department of State, Washington, DC,
in 2018 for ‘Furthering USA-India Relationships in Higher Education’. She is also
the recipient of the Central European University (CEU) summer school scholarship
on ‘Innovative Financing for Education: Arguments, Options and implications’ in
Budapest, Hungary, in 2016.

Higher Education Financing
in India
Student Loans and Equity in Access
Jinusha Panigrahi
F irst published 2022
b y Routledge
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© 2022 Jinusha Panigrahi
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
A catalog record for this book has been requested
ISBN: 978-0-367-40903-6 (hbk)
ISBN: 978-1-032-26969-6 (pbk)
ISBN: 978-0-367-80979-9 (ebk)
DOI: 10.4324/9780367809799
Typeset in Sabon
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In Memory of my Beloved Father
Er. Benudhar Panigrahi

Contents

List of Illustrations viii
Foreword ix
Acknowledgements xi
List of abbreviations xii
1 Introduction 1
2 Financing of higher education 1 2
3 Issues of access and choice in the stage of massification 32
4 Policy trending towards loan financing as an alternative 74
5 Experimenting with other innovative methods of
financing 108
6 Conclusion 121
References 129
Index 140
Illustrations

Tables
2.1 Expenditure on Tertiary Education from Government
Sources in Selected Countries as a Percentage of GDP 23
2.2 Government Expenditure per Tertiary Student as % of
GDP Per Capita 24
2.3 Composition of Total Allocation for Education in Different
Five Year Plans 26
2.4 Budgeted Expenditure on University and Higher Education
by Education Department (Revenue Account) 27
3.1 Expansion of Higher Education Institutions and Enrolments
in India 39
3.2 Category-wise Representation of Students in GER and
Management-wise Share of Enrolments in Colleges 40
3.3 Determinants of the Choice of Institutes by T/P Institute
Students (1) 64
3.4 Determinants of the Choice of Institutes by T/P Institute
Students (2) 65
3.5 Determinants of the Choice of Professions G/NT
Institute Students 70
4.1 Determinants of the Educational Loan Borrowed/Not
Borrowed 100
5.1 Committees and Commissions and Transformation in
Funding Methods in Indian Higher Education System 114
Figures
2.1 Percentage Share of Financial Aid to Total Budget. 30
4.1 Growth of Education Loans in India over the Years 86
Foreword
This century has experienced a revival of higher education globally. India is
not an exception to this phenomenon. The revival is the result of the reforms
to expand the system and enhance quality of higher education and alternative
methods of financing of the system. India has moved to a stage of massifica-
tion of higher education with student enrolment crossing 37 million and GER
reaching more than 27 per cent. India established external quality assurance
agencies and internal quality assurance cells to ensure enhanced quality of
higher education. Further, India initiated a national ranking process with the
National Institutional Ranking Framework (NIRF) in 2015. The results of
the NIRF ranking indicated the performance variations and quality of educa-
tion imparted among institutions under different managements.
P ublic funded education became an integral part of public sector domi-
nated development strategy during the post-independence period in India.
The National Policies on Education in 1968 and in 1986 reiterated the strat-
egy of public financing of education and a national commitment of investing
6 per cent of the GDP on education. Public-funded higher education had its
golden days in the 1960s when state funding was forthcoming.
T hanks to the initiatives to achieve EFA goals, the pressure to expand
higher education increased and it surpassed the fiscal capacity of the state
to satisfy the growing social demand for higher education. When strains in
public funding came up in the 1980s, self-financing courses emerged in the
public institutions which gave way to self-financing colleges and later to the
massive expansion of private higher education institutions. This period also
coincided with the ascendancy of market in economic decision-making and
expansion of the spheres of globalisation. India adopted market-friendly
reforms in higher education as part of the reforms related to liberalisation
policies and globalisation process in the economic sector. Market-friendly
reforms introduced by the state in higher education included cost recovery
measures in public institutions and the promotion of private sector to own
and operate colleges and universities. These reforms led to a massive expan-
sion of the higher education sector in this century.
U nlike in the developed world, the massification of the higher education sec-
tor in India heavily relied on private institutions. The major challenge facing