Vol. 11, Issue 4, Part E (2025)

Abstract
Education loans play an important role in providing financial assistance to students, and dealing with non- performing assets (NPAs) may have an influence on credit growth, limiting access to quality education and reducing economic productivity. Understanding the relationship between macroeconomic factors and defaults will aid in predicting future opportunities and mitigating risks in the education loan sector. Against this backdrop, this paper explores the relationship between the country's macroeconomic conditions and NPAs in the context of India. While education loans are critical for skill development and increased productivity, rising NPAs are worrying since they may lead to dropouts due to financial limitations. The study examines macroeconomic parameters such as the gross enrollment ratio, the number of higher education institutions, and the unemployment rate to explain educational loan defaults. However, the study finds no statistically significant impact of these macro factors on rising NPAs. It indicates that future study should focus on borrower-specific and loan category- specific characteristics such as gender, course selection, interest rates, collateral, credit risk assessments, and loan term. Banks might utilize the findings to rethink their lending practices and risk assessment methods for student loans. Policymakers can use the findings to develop targeted initiatives and policies to alleviate NPAs and guarantee that deserving students have access to an education. Students may benefit from improved loan terms and increased access to educational finance options.