BORROWING FOR A BETTER FUTURE?

As tuition fees continue to rise both at home and abroad, a growing number of Bangladeshi students are turning to banks for education loans in the hope of realising their academic and career ambitions. While several private and state-owned banks have introduced student loan schemes, questions remain over their accessibility, affordability and overall effectiveness.
Among private lenders, BRAC Bank, City Bank, Mercantile Bank, Eastern Bank, One Bank, Dhaka Bank and NCC Bank currently offer student loans covering tuition and, in some cases, living expenses.
Those working closely in the sector say demand for such loans is increasing rapidly. Bangladesh’s higher education system continues to face chronic challenges, including inadequate budgetary allocations, corruption in teacher recruitment, recurring question paper leaks and declining academic standards. As a result, many students aspire to study at reputed universities abroad—whether in Western countries or Asian destinations such as China, South Korea and Japan—for undergraduate and postgraduate degrees.

Despite this growing demand, access to education loans remains limited. Most loan schemes require guarantors, collateral or proof of stable family income, placing them beyond the reach of many middle- and lower-income households. High interest rates and lengthy approval processes further reduce their usefulness.
Analysts point out that although banks have entered the education financing space, the absence of a comprehensive, state-backed student loan scheme leaves thousands of deserving students without financial support.

What banks are offering
Dutch-Bangla Bank Limited (DBBL) provides loans covering tuition fees, living expenses and travel costs for students studying both in Bangladesh and overseas. For higher loan amounts, collateral may be required.
BRAC Bank offers education financing with flexible repayment schedules, although applicants must submit guarantors and proof of income.
Eastern Bank Limited (EBL) has introduced comparatively competitive interest rates for students planning to study abroad, typically covering tuition and other related expenses.
Janata Bank continues to operate its education loan programme, though eligibility criteria remain restrictive. According to the bank, applicants must be executives, officers or employees of government, semi-government or autonomous bodies, banks, non-bank financial institutions (NBFIs) or multinational companies, and must have been in permanent service with their current employer for at least two years.
Applicants must also have a minimum net monthly salary of Tk25,000. In addition, the student must have passed all previous semester or final examinations with a minimum CGPA of 2.75.
Janata Bank offers education loans without collateral ranging from Tk50,000 to Tk2 lakh. With collateral, the maximum loan ceiling extends to Tk10 lakh. In line with Bangladesh Bank guidelines, interest rates may go up to 13 per cent, with a maximum repayment period of 60 months.
Mutual Trust Bank (MTB) provides education loan services through its MTB Student File Services, which support students pursuing higher education abroad. The facility covers admission fees, tuition fees, living expenses and other related costs.

Parents may also apply under MTB’s Edu Finance Package, which offers loans ranging from Tk1 lakh to Tk20 lakh. The repayment period spans 12 to 60 months, with interest rates determined in accordance with Bangladesh Bank guidelines.
Prime Bank, under its education package, offers loans of up to Tk20 lakh with a repayment period of up to five years. HSBC Bank provides education loans without requiring personal guarantors or cash collateral, ranging from Tk50,000 to Tk7.5 lakh. However, the interest rate stands at 18 per cent, with a repayment tenure of 12 to 60 months.
Other banks, including Prime, City and NRB Global Bank, run similar schemes. These programmes typically demand extensive documentation, including proof of admission, guarantors and, in some cases, mortgage-backed collateral.
While these initiatives mark progress, critics argue that rigid eligibility requirements make them inaccessible to most students. Many families fail to meet the criteria, leaving ambitious learners without the financial support they need.
Experts stress the urgency of introducing more inclusive, low-interest education loan programmes to ensure access across income groups.

Students going abroad: the numbers
For several years, inadequate funding and repeated question paper leaks in Bangladesh’s education system have contributed to a steady rise in the number of students seeking higher education overseas.
According to UNESCO’s report Global Flow of Tertiary-Level Students, 52,799 Bangladeshi students studied abroad across 55 countries in 2023. This compares with 49,151 students in 2022 and 44,338 in 2021. A decade earlier, in 2013, the figure stood at just 24,112.
Data from Bangladesh Bank over the past five fiscal years show that overseas education spending has risen sharply alongside student migration.
In the 2024–25 fiscal year, Bangladeshis spent a record $662 million on education abroad. This follows expenditures of $533.2 million in 2023–24, $520.8 million in 2022–23, $414.5 million in 2021–22 and $243.1 million in 2020–21—meaning spending has more than doubled within five years.

Expert opinion
Professor Shahidul Islam Zahid, chairman of the Department of Banking and Insurance at the University of Dhaka, told the Daily Sun that student loans remain a complex and risky issue for banks in Bangladesh.
“Banks consider lending to students risky. After completing higher secondary education, most students do not engage in paid work. They focus mainly on tuition and academic studies rather than earning an income,” he said. “If a student wants to pursue higher education abroad with a bank loan, it is often denied. Banks worry about whether the loan can be repaid. As a result, loans are usually issued under the parent’s name with collateral, and even then many students fail to secure them.”
He contrasted this with practices abroad, where students frequently obtain bank loans because they can work part-time during their studies and are more likely to secure employment after graduation—factors that reassure lenders.
Looking ahead, Professor Zahid stressed the need for systemic reform. “Bangladesh’s education system must be modernised. Alongside academic learning, students need technical and employable skills. There must be greater assurance of employment after graduation. Only then will banks and financial institutions be willing to provide student loans more easily,” he said.

The reporter can be reached at: [email protected]