Empowerment's Gained by the Educational Loan Takers in
Coimbatore City


By

Dr. R. Geethalakshmi
Head Department of MBA
Coimbatore Institute of Management and Technology
 


1.1 Introduction:

Education is central to the Human Resources Development and empowerment in any country. National and State level policies are framed to ensure that this basic need of the population is met through appropriate public and private sector initiatives. While government Endeavour to provide primary education to all on a universal basis, higher education is progressively moving into the domain of private sector. With a gradual reduction in government subsidies higher education is getting more and more costly and hence the need for institutional funding in this area. The scope of education has widened both in India and abroad covering new courses in diversified areas. Development of human capital is a national priority and it should be the Endeavour of all that no deserving student is denied opportunity to pursue higher education for want of financial support. Loans for education should be seen as an investment for economic development and prosperity. Knowledge and information would be the driving force for economic growth in the coming years. Government of India in consultation with Reserve Bank of India (RBI) and Indian Banker's Association (IBA) has framed a Comprehensive Educational Loan Scheme to ensure that no deserving student in the Country is deprived of higher education for want of finances.

1.2 Need for the study:

The student education loan provided by the banks has empowered the college students to pursue higher education. The downtrodden and the deprived student who are suffering from poor economic conditions are given a boon by the commercial banks in the name of  educational loan. By taking the educational loan from the banks the students are getting a greatest opportunity to complete their higher education which has given them two empowerments viz., Economic empowerment and Social empowerment.  Thus the paper tried to fit a structured equation modeling to test the usefulness of the educational loan with the empowerments gained by the student.

1.3 Sample size:

A sample respondents or loan takers of 250  were selected in terms of convenience  from  different commercial banks in Coimbatore city and a  suitable instrument.  Respondents perception  towards getting education loan  with bank were identified through a five point scaling technique ranked from 5 – 1 ( 5 – Highly Agree, 4 – Agree, 3 – Neutral, 2 – Disagree, 1 – Highly Disagree).

1.4 Variables selected for the study:

USEFULNESS

*
The loan issued is of a social security to me
* The loan was given at the time when i was in need
* The loan at every time is dispersed at the time of paying fees.
* The loan amount was not delayed at all

SOCIAL EMPOWERMENT

*
The educational loan gave me strength to lead my studies
* The loan has given me equal chance to proceed my studies without complexes in my mind
* I was treated with par in the college
* The loan has helped me in completing the education

ECONOMIC EMMPOWERMENT

*
By providing educational loans will help the students to access their higher education
* Educational loans gave much access to finance
* Educational loans increases job/self employment
* Educational loans provide opportunities not to go with financial intermediaries

Reliability and Validity:

Construct

Composite Reliability

AVE

Cronbach Alpha

PERUSF

0.124836

0.26

0.073505

SOCINF

0.553509

0.29

0.193625

PERESF

0.539843

0.27

0.765103


The table has indicated that all the variables mean and standard deviation of the scale items and reliability alpha coefficient for each variable. The selected variables  are significant at P <.05 and Alpha values are >.7 for each individual item. The Cronbach alpha is also significant and enable the execution of the model. 

Confirmatory factor analysis

Construct

Indicator

Mean

Stdev

Loading

Residual

Weight

PERUSF

           
 

pu1

2.896414

1.235001

0.3448

0.8811

-0.3121

 

pu2

3.079681

1.275

0.9204

0.1529

0.908

 

pu3

2.956175

1.354279

0.1315

0.9827

-0.1503

 

pu4

2.972112

1.237424

0.2072

0.9571

0.1781

SOCINF

           
 

si1

3.10757

1.311634

0.8726

0.2385

0.809

 

si2

2.904382

1.361918

0.1957

0.9617

0.1254

 

si3

3.003984

1.35203

0.487

0.7629

0.3888

 

si4

2.916335

1.340512

0.3265

0.8934

0.2456

PERESF

           
 

u1

2.952191

1.361508

0.3743

0.9945

-0.0516

 

u2

2.840637

1.332104

0.4972

0.7528

0.4402

 

u3

2.904382

1.307983

0.3376

0.9811

-0.1731

 

u4

3.071713

1.392421

0.7418

0.4497

0.3398

 

u5

3.071713

1.392421

0.7418

0.4497

0.3398

 

u6

2.701195

1.297058

0.4979

0.7521

0.5006


Model

Ho: There is no significant association between the Perceived usefulness of the education loan and the empowerments gained.


Variables

RSQ value

Result

SOCIAL EMPOWERMENT

0.026

Significant

ECONOMIC EMMPOWERMENT

0.072

Insignificant


Conclusion:

The study has proved that the educational loan has provided the students with social empowerments as the Rsq value found  to be significant and the economic empowerments has been insignificant. Hence it could be clearly understood from the analysis that student educational loan takers have gained social empowerments by the loan on paying the fees promptly and complete the education by proving their merit without any financial hindrances. And it is well understood that after completing the education the loan takers have to compete with their intelligence and get a better job in the completion world . The commercial banks have helped the loan takers to the level best in enhancing the social life .

References:

1.
Avery, Christopher, and Sarah Turner. 2012. "Student Loans: Do College Students Borrow Too Much--Or Not Enough?" Journal of Economic Perspectives, 26(1): 165-92.

2. Baum, Sandy, and Marie O'Malley. 2003. "College on Credit: How Buyers Perceive Their educationdebt." Journal of Student Financial Aid 33(3): 7–19.

3. Chopra, Rohit. 2013. "Student Debt dominoeffect?" Op-ed. Washington, DC: consumerfinancial Protection Bureau.Consumer Financial Protection Bureau. 2013.

4. "Student Loan Affordability: Analysis of Public Input on Impact and Solutions." Washington, DC:Consumer Financial Protection Bureau.Edmiston, Kelly D., Lara Brooks, and stevenshelpelwich. 2013.

5. "Student Loans: Overview and Issues (Update)." Research Working Paper RWP 12-05. Kansas City, MO: Federal Reserve Bank of kansas City. Federal Reserve Bank of New York. 2013.

6. "Quarterly Report on Household Debt and Credit." Research and Statistics Group, Microeconomic Studies. New York: Federal Reserve Bank of New York. Fonseca, Raquel, Kathleen Mullen, Gema Zamarro,and Julie Zissimopoulos. 2010.

7. "What Explains the Gender Gap in Financial Literacy? The Role of Household Decisionmaking." Working Paper WR-762. Santa Monica, CA: RAND.
 


Dr. R. Geethalakshmi
Head Department of MBA
Coimbatore Institute of Management and Technology
 

Source: E-mail May 27, 2014

          

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