Credit Based Higher Education System-Status, Opportunities and Challenges

Credit Based Higher Education System-Status, Opportunities and Challenges


Education has always been considered an extremely essential part of Indian culture. The old sages tell us about Gurus or teachers who had a great impact on their students. The business of imparting education has not been considered a business since time immemorial.

The students of that era did not face any financial burden with respect to education. India was considered a superb destination of higher learning as students and teachers were not a part of any donations. But, the transformation took place under the British rule as they were of the view that free education would not be valued by the countrymen.

However, Jawaharlal Nehru, India’s first Prime Minister whose ideas leaned towards socialism ensured institutions were open to best of minds- despite the paucity of funds. This was made possible by liberal state grants ensuring low fees for students. The system managed to work well until the 1990s when the structure started to change. The unshackling of the Indian economy made it mandatory to look at education sector with a fresh mindset. Hence, the time to transform higher education had arrived.

Firstly, the changing economy demanded students passing out of colleges to possess skills as well as relevant credentials and not just a standard graduation degree. In order to work with management practices and new technologies, the sector entailed large scale investment to train India’s youth.

Also, the country had a mediocre record in penetration of higher education and it could not go on with the ambition to take the economy on a high growth trajectory. Hence, such a scenario could not let dependence on government be a constraint. This is because public funds are scarce and cannot suit such an environment.


This led to the arrival of credit based education system. Some other factors that drove the change included better paying jobs because of which students were willing to pay more for higher education. The integration of the domestic economy with that of the world also led to higher migration of qualified people including teachers for better prospects.

The need for higher investment has over time led to increase in the number of private institutions, hiking of fee by government institutions and banks taking advantage of the opportunity. A large number of foreign universities have also set base in the country.


In terms of opportunities, the credit based higher education system has the potential to create world class human resources. If a state-of-the-art infrastructure is built, it would help in retention of the much needed good teachers as well as help in ensuring a positive feedback mechanism from students. The model also has the power to immensely enhance India’s soft skills who could go abroad and create an all together different identity.


However, there are some grave concerns which need to be looked at as well. Since stakes in the new system are higher, the system does put a lot of pressure on students, ignoring any sensitivity towards students. The anxiousness associated with being unable to pay back the credit drives some students to take extreme measures such as suicide or other drastic steps. Another drawback is that in the backdrop of effective regulatory mechanism, it would put both students as well as guardians at the mercy of colleges. Even a mediocre institute may charge higher fee under the pretext that a good institution should be charging a higher fee. This is where paid rankings may come to the fore demonstrating the ugly side of information dissemination.

Hence, the possibility of some institutions being hand-in-glove scenario cannot be discounted. Ultimately, students would have to look at lucrative side of the market and sideline research oriented jobs. The high fees also makes it difficult for poor people from the system as they may not have the wherewithal to shell out a lakh of rupees for education.

Therefore, if the system has to be effective, there is an urgent need of putting in place a regulatory mechanism. All the talk regarding empowering the future of students are as good as hollow words unless and until effective checks and balances are not ensured to make the country a true powerhouse of education. Amongst the strong growth of Information Technology and engineering, not much has been done to provide large incentives for making the country a hub for Research & Development worldwide.


The credit based model may be trendy and surely offers immense potential to the country’s future but only sufficient measures to address pertinent concerns can ensure it goes a long way for helping the education sector.
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