Cheaper student loans-led economic growth

The Express Tribune published an opinion column arguing that Pakistan should offer subsidised finance for education as it does for homes and exports. Subsidised home loans now go up to Rs10 million at a customer rate of 5%, while an EV financing ceiling of the same size is still awaiting final rules. According to Unicef, 25.1 million children are outside school, equal to 35% of the 5 to 16 age group.

Literacy among those aged 10 and older stood at about 60.7% in the 2023 census. NBP already administers an interest-free student-loan scheme, but the writer argues it lacks universal and dependable access. The writer proposes a PM Apni Taleem programme open nationwide, with finance ranging from Rs50,000 to Rs5 million at 5% annually on a reducing balance over 30 years.

The column estimates that at an illustrative 11% Kibor the subsidy gap would be eight percentage points, or Rs8 billion a year per Rs100 billion outstanding before defaults and administration costs. It suggests banks could receive Kibor plus 2%, with the state covering the gap and backing 50% of net credit losses once verified. The writer adds that jobs and quality matter as much as loans.