Can student loan scheme bridge higher education divide?

Ismail Hossain Naim has always dreamed of studying at a reputed university. He passed the Higher Secondary Certificate examinations from a college in Bhola last year and was preparing for university admission. 

But the Covid-19 pandemic massively disrupted academic activities across the country and his dream was shattered by another major obstacle – finances.  

"I have enough scores to secure admission at a good university. But I cannot continue my studies as my family is unable to bear my educational expenses," Naim told The Business Standard.

He ultimately decided not to pursue higher studies. Instead, he started working to financially support his family.

A division was always there between urban and rural students, and the Covid-19 pandemic has widened it further. The gap is even wider in case of higher education. 

Reasons include the inability to afford devices to attend online classes and the worsening socioeconomic condition as many blue-collar employees lost their jobs. 

Professor Selim Raihan, executive director of South Asian Network on Economic Modeling (Sanem), told The Business Standard a digital divide had already been created among students, with poor and rural pupils unable to attend online lectures arranged by educational institutions during the pandemic. 

Different government and private surveys also found the same. 

According to a recent Sanem survey, the upper poverty rate in the country increased to 42% in December last year from 21.6% in 2018 due to the novel coronavirus. 

At least 8.6% of the survey respondents lost work during the pandemic and could not find a new job. Moreover, earnings of 55.9% of the respondents decreased during that period while that of 17.3% remained unchanged. 

Around 82.1% of the households said they had received less remittance from abroad compared to what they had received before Covid-19.

"There is also a big possibility that many students will not be able to enrol at university as they may start working to secure their livelihoods. Education will be a second option for them. It will affect the country's economy in the future," Professor Selim said.

"We see a clear social divide because students of rich families will get higher education at prestigious universities whereas those from poor families may drop out," he explained.

Things were not great even prior to the pandemic. The income disparity among families of tertiary students has been big for years. According to a 2019 World Bank survey, students of the richest segment of the population are overrepresented in tertiary education, and even more so at more prestigious institutions.

The survey titled "Bangladesh Tertiary Education Sector Review Skills and Innovation for Growth" found that 65% of public university students and 57% of private university pupils come from the richest households. Enrolment in public colleges is also greatly in favour of the richer group.

Even though the government and some private organisations provide merit-based financial aid for tertiary education to students of lower-income households, the aid is nowhere near adequate. 

The education system in place continues to leave out a large portion of the student population in tertiary education, and what it regrettably lacks is a national student loan scheme, the World Bank report said.  

It said there is currently no national student loan scheme in Bangladesh to help tertiary students. 

Professor Dr Md Alamgir, a member of the University Grants Commission, told The Business Standard they have a plan to introduce a national loan scheme for students who will start higher education but no initiative has so far been taken in this regard. 

He said such a scheme would definitely be helpful for students of lower-middle income families. 

A national student loan scheme has the potential to drastically improve the current higher education scenario. Countries such as India, Pakistan, Sri Lanka, Ghana, South Africa, Australia, and Sweden have such schemes with some variations, and all those proved to be tremendously successful. 

In Bangladesh, some banks, such as Mercantile Bank, Eastern Bank, Brac Bank, IFIC Bank, NCC Bank, Uttara Bank, Standard Chartered Bank, HSBC, and Agrani Bank, offer student loans. But in most cases, students of low-income families are left out as obtaining this loan requires a certain amount of bank deposit and proof of substantial monthly income.  

This contributes to the World Bank survey's findings that tertiary education in Bangladesh has been dominated by students of the richest segment of society and that it is significantly more unequal than secondary education, which is also hard to attain for low-income students.

"Around two-thirds of university students come from urban families, and their parents have considerably higher levels of educational qualifications – around 50% of their fathers have a bachelor's degree or higher," the report said. 

A more equal access to tertiary education in Bangladesh across all strata of the society can be aided by a national student loan scheme, experts say. 

The World Bank report recommends the scheme be carefully designed with in-depth analysis of foreign national student loan systems and that the country's social context be taken into account. This way, an effective incentive system and an efficient loan repayment mechanism can be developed. 

Professor Dr Siddiqur Rahman, former director of the Institute of Education and Research at the University of Dhaka, said the government should introduce a national student loan scheme as early as possible. 

"We are losing many talented students as they cannot continue their studies due to financial problems. A loan scheme can protect them and they can use their talent for the betterment of the country," he said. 

He also emphasised proper monitoring of loan distribution, saying only poor and meritorious students should be able to get loans.