Student loans schemes are currently in operation in more than 80 countries around the globe. National student loan programs were first established in the 1950s in countries as diverse as Colombia, Denmark, Norway, Sweden, Japan, and the United States. There was a surge of interest in student loans in the late 1980s and 1990s, with new programs introduced in Australia, New Zealand, and the United Kingdom; several countries in eastern Europe and the former Soviet Union, including Hungary and Russia, considering introducing student loans for the first time; and some developing countries in Asia, Africa, and Latin America establishing or expanding student loan programs. Student loans are increasingly used to provide financial assistance for students in HE, in both industrialized and developing countries.

Financial assistance enables students from low-income families especially, to meet direct and indirect costs of education i.e. tuition fees, books, and living expenses. Hence in order to safeguard poor students from the rising costs of HE many developing and developed countries have established student loan programs to financially support students (Salmi, 1992; Tilak, 1997). However, in many developing countries, governments could not continue much needed spending on education (Mingat and Tan, 1986; Douglas and Adrian, 1992). Government funding on HE is being cut in many countries. While educators opine that the Government should not abandon its responsibility of liberal funding of higher education (Kaul, 2006). Poor and deserving students will not be able to get HE without government funding.

The education sector has experienced a steep growth after liberalization in 1991. Many MNCs have entered India in many sectors. Now, India is among the leading IT players. The job opportunities in the local and international market have prompted the students to acquire higher education. This opportunity is harvested by many commercial banks by financing higher education in India (Narayana, 2005).

The vast opportunities in this sector have attracted many national and international players for investment in HE Industry. The literature survey revealed the good work was done on HE in foreign countries but India lacks research in this field. In this research based on gap analysis an attempt is made to fill the gap.

Despite the opportunities this sector is full of challenges. In this research an attempt has been made to explore the challenges faced by Indian managers in context of HE finance. In this paper the challenges have been decided upon based on strong literature support in consultation with practitioners and consultants in the field of HE finance. Pre-pilot and pilot survey was done to improve the questionnaire. Later on full survey was conducted in the principal cities of Punjab and Chandigarh in India. The reason for selecting these cities was that these are the current and potential educational hubs, first and secondly, there exist tremendous demand for HE finance in these cities. Moreover, many players to finance HE, have come up in these major cities of Punjab state. The technique of factor analysis is applied to group the challenges and structural equation modeling is used to test and prove the hypothesis.

Representative APR 391%

Let's say you want to borrow $100 for two week. Lender can charge you $15 for borrowing $100 for two weeks. You will need to return $115 to the lender at the end of 2 weeks. The cost of the $100 loan is a $15 finance charge and an annual percentage rate of 391 percent. If you decide to roll over the loan for another two weeks, lender can charge you another $15. If you roll-over the loan three times, the finance charge would climb to $60 to borrow the $100.

Implications of Non-payment: Some lenders in our network may automatically roll over your existing loan for another two weeks if you don't pay back the loan on time. Fees for renewing the loan range from lender to lender. Most of the time these fees equal the fees you paid to get the initial payday loan. We ask lenders in our network to follow legal and ethical collection practices set by industry associations and government agencies. Non-payment of a payday loan might negatively effect your credit history.

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