More loans for IIMs but nil for vocational courses

For those seeking educational loans to achieve their academic dreams, here is cause for cheer: Students choosing academic courses in India can now borrow up to Rs.10 lakh (Rs. 1 million), up from the previous Rs. 700,000. For overseas programmes, the ceiling will be Rs. 20 lakh (Rs. 2 million). However, those pursuing vocational courses, skill development courses, off-campus courses and on-site or partnership programmes in the country and diploma courses and certificate courses abroad will no longer be eligible for educational loans. These are part of the new guidelines for educational loans issued by the Indian Banks’ Association (IBA) to its member banks.

Banks will now have the freedom to consider a higher loan for special courses such as those in institutes like the premier Indian Institutes of Management (IIMs). Moreover, for loans up to Rs. 750,000, the repayment period has now been extended from five years to 10 while for loans above Rs. 750,000, it has been extended from five years up to 15 years. Moreover, students seeking admission to an educational institution through the management quota too cannot avail themselves of an educational loan as part of a directive by the Ministry of Finance to banks asking them to revamp existing educational loan schemes. The revamp also extends the repayment period for loans. While banks are now free to fix their own interest rates, the government will extend a 1% interest concession during the study or moratorium period. However, banks must charge lower rates for loans up to Rs. 400,000 with a concession of up to 50 basis points for girl students.

According to the guidelines, merit will be the sole criteria used by banks to assess loan candidates. However, postgraduate studies leading to PG degrees and PG diplomas offered by reputed institutes / universities will be covered by educational loans. However vocational / skill development study courses, off-campus courses and on-site / partnership programmes are not eligible for loan under the new IBA scheme. What is also new is that courses for teachers training, nursing and B.Ed courses will be eligible for education loans, provided the training institutions are approved either by the central government or the state government. Such courses should necessarily result in a degree or diploma course and not just a certification.

Banks can ignore the financial position of parents while evaluating loans to a meritorious student. The repayment possibilities have to be based on the projected future earnings of the student on employment after education. To avoid being subjective, banks can rely on market information to gauge the earning potential for various careers as also the repayment capability.

Source: The Financial Express, September 8, 2011

President urges educational institutes to produce more ’employable’ youth

Lack of employable skills among Indian youth for jobs is “worrisome” and professional institutions should help improve employability, President Pratibha Patil said in Hyderabad today. The President who delivered a key note address at Indian School of Business (ISB) said it is estimated that the economy faces a shortfall of 200,000 engineers, 400,000 graduates in other fields and 150,000 vocationally trained workers.

“Its a worrying sign that even though the third largest number of graduates in the world every year is produced in India, only 15 per cent of our boys and girls passing out of college have the skills required to become employable! This brings in concerns that students are getting degrees, but not getting employable hands-on skills,” Patil said.

Government has set-up the National Skills Development Corporation (NSDC) – a Public Private Partnership – to skill 500 million people by 2022 and institutions like the ISB should not only participate in it, but through interaction with the business world, help in developing the required skills, she said.

The objective of an educational institution is to prepare its students to meet the competitive environment of a knowledge based and technology driven world, which is driving change at a rate that necessitates rapid adaptability and the ability to invent and to re-invent, she explained.

“As a society transforms, its education system must respond to change. Its only then, that will it be relevant. Educational institutions must create the human resource capacities required for the times,” the President said in her speech. She suggested that the corporate world should design their business models in such way that it can go hand in hand with growth that is beneficial to society.

Patil remarked that the most successful corporate of the world are the ones which have a commitment not only towards the shareholders of their company, but indeed to society at large.

Source: The Economic Times (Online Edition), July 4, 2011

IGNOU Community College set to empower youth

The community college at Manesar is set to empower the youth by providing them with access to skill-oriented education. The community college at Manesar is established by an autonomous society jointly created by the Technical Education Department of the Haryana government and Indira Gandhi National Open University (IGNOU). V.N. Rajasekharan Pillai, Vice-Chancellor, IGNOU, says, “The aim of starting this college is to provide skill development among the youth and skill upgradation of workers, particularly in the unorganised sector in the state of Haryana.”

The Haryana government and IGNOU saw Manesar as the ideal place to start such an initiative for several reasons. It is a fast growing industrial township. More than 125,000 people go to work in Manesar from adjoining places. It is in the Delhi-Mumbai industrial corridor project and many of the government-sponsored mega industrial development projects are in Manesar.

Besides, it has many factories, offices, hotels and educational institutes. Manesar houses the headquarters of many institutes of national importance like the National Security Guards and its large training establishment, and the National Brain Research Centre (NBRC). The township has a conglomeration of small and medium-size industries, big corporate centres and dozens of manufacturing and production units – Indian and multinational.

Community colleges require strong partnerships with such industrial and training units. Apprenticeship, work-integrated learning and on-thejob-training are integral parts of the IGNOU Community College system. The proximity of the top class facility of the Manesar Polytechnic and its teaching and training faculty add value to the entire proposal for the Haryana-IGNOU Community College at Manesar.

In India less than 5% of the total workforce has some sort of a skill certification. This is in contrast to over 90% in developed countries. Around 500 million youth will need new skill opportunities by 2022. As of now, not even 30% of our educated youth are employable because they don’t possess the skill-set required for the industry or the social sector.

The courses that will be provided will include IT, automobile production, textiles, security operations, soft skills, tourism and hospitality management, culinary arts, food preservation and technology, pharmaceuticals sales and management and in the area of paramedical sciences.

“A few industries have already come forward, and we are in dialogue with some of the major hospitals for paramedical areas. The course will be in the modular format, starting with certificate, diploma, advanced diploma and associate degree, respectively for courses ranging from six months to 24 months. The curriculum and content of the core courses will be supplemented with training and content from the partner industry according to the requirements,” says Pillai.

There will be a full-time principal for the Community College and one full-time teacher for each of the courses. All the other teachers and trainers for each of the course will be part-time, contract staff adjunct teachers and trainers. IGNOU is also providing training for teachers in community colleges. Talking about the infrastructure, Pillai says, “We have a building with classroom facilities. Lab and training facilities are being built jointly with participating industries. As of now there is no hostel accommodation. The classes will be in shifts starting from 8 am till 8 pm.”

Courses will be available for students who have completed their class XII. For working professionals and school drop-outs a preparatory bridge course of six months has been designed to make them eligible for entry into the degree programme, for the community college programme. Admissions are on till July 31. Classes will begin in the first week of August.

Source: The Times of India (Education Times), June 27, 2011

IIM Shillong goes local to groom youth from north eastern region

The newest Indian Institute of Management (IIM) in the country, IIM-Shillong, has gone local. In 2009, the coveted B-school in the eastern Himalayas had started the Centre for Development of the North Eastern Region (CEDNER ), to pilot ambitious projects that would spearhead development in the region.

Now, a part of that, it has taken up the task of organising training programmes for managers, executives and defence personnel who live and work here, besides providing consultancy for local firms. The centre is involved in organising both short and long-term programmes that would benefit local communities.

CEDNER, was formerly known as the Accelerated Learning Centre (ALC), was set up a year after IIM-Shillong itself came into existence. There are now plans to have this institute branch out to parts of Assam, Mizoram and Nagaland. Ashoke K. Dutta, Director of IIM-Shillong, says setting up of the centre provides the ‘strategic intervention’ the region required, and that the institute itself would not operate merely like an island of excellence. “We were very clear that we needed to do something about the hopes and aspirations of the local people,” he says. “Otherwise, what are they to do with an IIM?”

The courses offered include management programmes for local retailers, armed forces personnel (of which there are quite a few here), principal of local colleges and hospital staff. The centre also aims to provide capacity building for local NGOs and sick public sector units in the region. To bring local talent up to speed, the institute also plans to offer courses relating to sports management, entrepreneurship and managing family businesses. “We have devised courses for Meghalaya tourism and the Meghalaya Cement Corporation,” says Dutta.

“For courses under CEDNER, our faculty does not charge anything. For instance, the course fee for the short-term retail management programme was Rs. 6,000, and the faculty put in extra effort to take classes in the evening. After the course, the students were hired by Pantaloons in Guwahati.” For some of the courses, the minimum qualification is a Plus Two or Class XII-level education, and in last two years, the centre has trained at least 275 youngsters through 15 different courses. Professor Keya Sengupta, who heads the centre, says local people, who may otherwise not have access and exposure to the latest methods of training for skill development, are provided the same by the institute. The idea, she adds, is to respond to local needs and make the facilities of the institute, available for the training of local talent.

Among the challenges faced by the centre was to integrate a complex set of socio-economic and environmental factors typical of the Northeast region, with worldclass training facilities that would bring out the hidden talent, skills and capabilities of the local youngsters. So far, the centre appears to have been somewhat successful, given that its programs are much in demand. For instance, Assam Hospitals, which manages several hospitals in Guwahati, has sought IIM-Shillong’s advice and consultancy on the human resources set-up in hospitals.

Source: The Economic Times (Online Edition), June 17, 2011

>Skill education may get bank loan facility

>Youngsters from poor families may soon be able to pay for skill development courses through loans issued at low interest rates, similar to the education loans given for professional and technical courses. The National Skill Development Corporation (NSDC), set up to boost the country’s skilled workforce, has proposed that skill development be made “an eligible category for financing from financial institutions/banks for rural and urban youth”.

“Skill training requires limited funds as most skill training is of limited duration… Making it part of priority sector lending, reducing interest rates and providing comfort to banks through a skill training fund are methods that could be considered,” said a note prepared by NSDC, a copy of which has been reviewed by Mint.

Skill development courses typically run for 3-12 months. The fees range from Rs.10,000 to Rs.100,000. Most skilled workers come from poor families in smaller towns, where raising such sums is a tall order, two government officials said, requesting anonymity. Skill training should be “made eligible for credit support as the country is targeting at inclusive development and creating a 500 million-strong skilled workforce by 2022”, one of them said.

The country faces an acute shortage of skilled workers, but the government has been unable to attract enough youngsters to skill development courses. NSDC has signed agreements with 24 organizations to promote skill development across India, but less than 25,000 youths received skill training over the past year, according to official data.

The government is now planning a Rs.100 crore (Rs. 1 billion) advertising campaign to bring more students to vocational schools, Mint reported on 23 March. Financing skill development remains a bottleneck, said Rituparna Chakravarty, Vice-President of TeamLease Services Pvt. Ltd, a staffing firm.

“We know as a fact that there are students who want to get into skill education, but cannot pay even Rs.10,000,” Chakravarty said. “Here, it will be a boost. From the industry perspective, it will improve efficiency and arrest high attrition of employees as the skilled manpower availability will increase.”

Source: Mint, May 2, 2011