An easy access to education loans is becoming difficult for the students. The banks are either declining the loan requests by the students and the parents or they are asking the loan applications to indulge in lengthy procedures. It is even more difficult for the Students under management quota as the banks are dubious about their academic credentials and loan repayment capacity.

A Madasamy, the banking ombudsman at RBI said that he had received a lot of complaints during the past year regarding the non- sanction or delayed disbursement of loans.

Thirunavukkarasu, a resident of Choolaimedu, had a similar experience when he approached a nationalised bank for a loan of Rs. 4 lakh for his daughter T Malathi, who had secured admission in a private dental college under management quota.

Thirunavukkarasu said that when he apprised the bank of the education loan that he had obtained for his son from another bank three years back, the bank officials asked him to approach the same bank this time also. When he went to the bank that had provided loan to his son, the bank officials said that in accordance to their policy, they are allowed to sanction only one loan per family. Thirunavukkarasu .When he returned to the bank he had first approached , the officials there asked him to get a letter from the other bank stating that they would not be able to grant him a loan.

After much pleading the bank agreed to process the application with the condition that they wanted a third party guarantor for the loan. Thirunavukkarasu alleged that loan up to Rs. 4 lakh does not entail a third party guarantor. Anyhow, he managed a third party guarantor for the loan. The bank then agreed but again with the condition that instead of disbursing Rs 1 lakh each for the next four years, the amount would be divided proportionately for the entire five year duration of the course. When Thirunavukkarasu surrendered, the bank agreed to sanction the loan.

Madasamy said that banks, despite having some limitations, cannot decline an education loan request to the students. After collecting all the details the bank should grant credit within 15 days. He added that the number of complaints had risen to 10,381 in 2008-09 but banks said that they were unable to disburse loans as some educational institutions were not recognised. Moreover capitation fees is not included in education loans . "If the loan applied is for college and hostel fees then the applicant has every right to complain that it has been denied by the bank'' said Madasamy.