Pakistan proposes education loans of up to 5 million rupees — The Express Tribune
In Pakistan, an independent economic analyst has proposed launching a nationwide PM Apni Taleem program for concessional education financing ranging from 50,000 to 5 million Pakistani rupees. The program could cover accredited schools, colleges, universities and vocational education institutions, The Express Tribune reports.
The columnist proposes setting a 5% annual rate for borrowers on a reducing loan balance, with a term of up to 30 years. He also proposes independently approved financing options compliant with Shariah norms. In his view, for low-income families, loans should be supplemented by larger grants, while for schoolchildren, grants and attendance payments should be prioritized.
Access to education
According to Pakistan's 2023 population census, the literacy rate among people aged 10 and older was approximately 60.7%: 68% among men and 52.8% among women. UNICEF estimates that 25.1 million children aged 5 to 16, or 35% of this age group, are out of school.
The article also cites a World Bank estimate using UNESCO data: 8% of students in Pakistan attain the minimum proficiency level in primary school mathematics, compared with 91% in Vietnam, although the assessments used for comparison differ. The author notes that the country already has an interest-free student loan program managed by the National Bank of Pakistan, but lacks universal and reliable access to education financing.
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Proposed mechanism
The author proposes splitting the costs of subsidies and state guarantees equally between the federal government and the provinces that join the program. Under this model, banks could receive the Kibor rate plus 2%, with the state covering the difference and guaranteeing 50% of verified net credit losses.
According to the calculation presented in the column, at a Kibor rate of 11%, the subsidy would amount to eight percentage points, or 8 billion rupees per year for every 100 billion rupees in outstanding loans, excluding defaults and administrative costs. The funds are proposed to be transferred directly to accredited educational institutions, with repayments beginning after the borrower reaches a protected income threshold.
The analyst also called on the prime minister to order the program's development within 90 days with the participation of federal and provincial agencies, banks, employers, educational institutions, charities and donors.
