At a meeting between the bank heads & the finance ministry, the banks expressed concerns that there might be a lot of risk in the Education Loans portfolio.

They feel that the biggest concern is with people taking loans to study abroad as
a. Traceability of the person is a challenge
b. A lof of these people take loans with out a guarantee.

these banks have hence gone slow in lending to this sector and have asked for an insurance cover (similar to the one in Home Loans) to ensure more aggressive disbursals of Education Loans.