Coimbatore: Students seeking education loans in Tamil Nadu’s Krishnagiri district received a major assurance this week from District Collector C. Dinesh Kumar. Speaking at the administration’s Education Loan Mela on Thursday (October 9, 2025), he clarified that banks cannot reject education loan applications on the grounds of a low or poor CIBIL score. Addressing students and parents at the event, the Collector said, “We will speak to the banks and get your loan sanctioned,” encouraging students to contact his office directly if they face any such issues. The statement was welcomed by hundreds of students struggling to secure financial support for higher education, particularly those from economically weaker families.

I wanted to write about this development because it highlights a critical issue that affects thousands of aspiring students across India. Education loans are often the only means for many to pursue higher studies, but technical barriers like CIBIL scores have made access difficult. A student’s academic merit or potential should never be overshadowed by their family’s financial history. The Collector’s stance reaffirms the government’s commitment to making education inclusive and accessible to all. Understanding such interventions is important because they remind us that education is a right, not a privilege tied to one’s financial background.

Collector’s Message: Education Comes First

During the Education Loan Mela in Krishnagiri, Collector C. Dinesh Kumar emphasised that financial institutions must process education loan applications fairly and in accordance with Reserve Bank of India (RBI) guidelines. He said that education loans are meant to empower students, and therefore, reasons such as low CIBIL scores cannot be used to deny their applications.

He urged students who face rejection to reach out directly to his office for assistance. “If your loan is rejected due to CIBIL score or any technical reason, approach us. We will intervene with the banks and ensure your case is considered,” he said. The Collector’s assurance sent a strong message to banks about prioritising educational needs over procedural barriers.

Officials from several banks, district education officers, and representatives from government departments attended the mela, which aimed to simplify loan approvals and help students understand available financial schemes.

What Is a CIBIL Score and Why It Matters

A CIBIL score is a three-digit number used by banks to evaluate an individual’s creditworthiness based on their past loan repayments. Typically, a higher score (above 750) indicates good credit behaviour, while a lower score suggests repayment delays or defaults.

However, when it comes to education loans, the RBI’s model education loan scheme clearly mentions that a student’s eligibility should not depend solely on the parent’s or guardian’s credit history. The objective is to ensure that meritorious students are not denied opportunities due to their family’s financial background.

In reality, though, many banks continue to use CIBIL scores as a deciding factor, leading to repeated rejections of applications — particularly from rural or low-income families. The Collector’s directive seeks to correct this trend and ensure fair treatment of all applicants.

RBI Guidelines and Government Support

According to the RBI’s education loan framework, banks are required to evaluate applications based on academic merit, admission to recognised institutions, and repayment capacity after graduation. The Indian Banks’ Association (IBA) has also advised banks to avoid strict reliance on credit scores for education loans, especially for first-time borrowers.

The government has introduced several initiatives to support students, including:

• Vidya Lakshmi Portal: A single-window platform for applying to multiple banks for education loans.
• Credit Guarantee Fund Scheme for Education Loans (CGFSEL): Provides government guarantee for loans up to ₹7.5 lakh without collateral.
• Interest Subsidy Schemes: For students from economically weaker sections and minorities.

The Collector’s statement aligns with these policies, reinforcing the message that access to education finance must not be limited by technicalities.

Students’ Struggles and Why This Matters

Across India, many students—particularly from rural and underprivileged backgrounds—struggle to secure education loans despite being eligible. Banks often cite low parental income, insufficient collateral, or poor credit history as reasons for rejection. This discourages deserving students and can force them to give up on higher education dreams.

In Krishnagiri, where several families depend on agriculture or daily-wage labour, the Collector’s assurance has brought renewed hope. Students now have the confidence to approach banks knowing that the administration stands behind them.

A student at the mela shared, “My father’s CIBIL score was low because of a small business loan issue. The bank had rejected my application earlier, but now I will reapply with the Collector’s support.” Such responses show how administrative intervention can restore trust and motivation among youth.

Strengthening Education Through Fair Access

Ensuring fair access to education loans is a vital step in promoting equality in education. When financial barriers are removed, talented students from all sections of society can pursue higher studies without fear of discrimination.

The Krishnagiri model, where the district administration directly engages with banks to resolve student issues, can serve as an example for other regions. Regular education loan melas, grievance redressal cells, and coordination committees between district officials and banks could make the system more efficient and transparent.