Master of Business Administration Executive

Faculty / School

Faculty of Business Administration (FBA)

Year of Award


Project Type

MBA Executive Research Project

Access Type

Restricted Access

Executive Summary

History of every nation owes a debt to the role of education which has played an important role in the civilization and development of human race. The literary meaning of education is to transmit the knowledge or experience to the others. In the words of Webster education is the knowledge and development resulting from an educational process. There are basically four formal education levels which include: preschool education, primary education, secondary education and higher education. Each level has its own importance; however, higher education is most important which enables a country to utilize its resources optimally and convert the country into knowledge economy.

In our analyses of different economies, it has been observed that education has played foremost role in the human development of countries like United States, Australia and Britain. It has also been observed that those countries which have not paid adequate attention to education have lagged behind the others in terms of human development which is primarily based on education, GDP growth and life expectancy.

Financing education has been an issue under various discussions. World experience has showed that financing education has not been the sole responsibility of the government. Governments also have to provide other facilities to the masses which include health, infrastructure and defense. Financially resources of most of the countries have proved insufficient to finance education particularly tertiary education. Therefore, public private mix is visible in almost every country for financing education.

Higher education due to its specialized nature has become much costly in major part of the world. There are large numbers of students forced to discontinue of their education due to financial deprivation. There are basically two ways to support the education of needy students: first by introducing targeted scholarship and second through providing education loans. In almost '80' countries student loan schemes are applicable and providing funding to students soft terms. In about 70' countries funds are provided by governments and these schemes generally have national scope.

In this paper, analysis of education loans in three countries viz. USA, Australia and India have been done for developing conceptual understanding of financing education loans. In USA,

Federal Student Aid an office of Education Department is responsible to manage the affairs of student loans. In USA, around $100 billion are provided to 14 million students each year in terms of education loans. There are basically, two types of loans viz. federal student loans and private student loans. In Australia, education loans are also provided by the government on discounted interest rate linked with CPI to the eligible students enrolled in commonwealth supported places. There are basically two categories of loans viz. HECS-HELP and FEE-HELP. India have somewhat different education loan scheme where commercial banks provide financing for education loans. The modalities of the schemes have been notified by Reserve Bank of India on the recommendation of India Banks' Association. Here also two types of loans are provided on discounted interest rate. Education loans are guaranteed by government of India.

Education has been among the least priority areas in Pakistan. Pakistan is considered a developed country. There may be several reasons behind its developing status but weak educational set up is one of the reasons. Pakistan is among those countries which devotes negligible part of their resources to education. Maldives, India, Sri Lanka and Iran all spend more resources in terms of percentage of their respective GDP to their education. Pakistan spends almost 2.8% of its GIMP to education which is lowest among the peers. Additionally, dropout rate in Pakistan in almost all education levels is higher as compare to other Asian countries.

Pakistan higher education system is mainly facing two problems: first access to education and second increasing trend of dropout due to financial deprivation. As per the statistics provided by Higher Education Commission, 10% of already enrolled students at higher education institutions (HEIs) discontinue their education due to financial deprivation. This 10% do not encompass those students who do not enroll in HEIs due to lack of access to higher education, per one estimate in the year 2011 over 90,000 students would require financial assistance.



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