‘Model Education Loan Scheme’, formulated by the IBA, mandates that banks provide collateral-free education loans lower than Rs 7.5 lakh. The IBA has provided broad guidelines for the lenders to follow, giving them the flexibility to offer varying education loan products to the customer. However, banks grant these low-ticket education loans without scrutinizing the financial ability and the future employability outcome of the applicants. The lack of employability combined with the fact that these are low-ticket unsecured loans, with no fear of property being possessed, is contributing more to the increasing NPA. Whereas loans with a value above Rs 4 lakh, require a guarantor, and loans above Rs 7.5 lakh, require a collateral. A student defaulting on a secured education loan runs the risk of losing the collateral, and therefore, they think twice before defaulting. As of 31st December 2021, 9.55 per cent of the education loans lent by the public sector banks were considered NPAs. Since low-ticket unsecured education loans have a higher rate of contribution to the increasing NPAs, banks have shifted to high-ticket secured education loans. This shift has done two main things-firstly, it impacted the low-income section of the society and created an education disparity, and secondly, it created room for EdTech companies, to bridge the gap that traditional lenders could not.