Higher education has a very significant role in the development of the societies-in terms of economic development, human development, gender-based development, improvement in health, life expectancy and poverty. However, most of the deserving students are denied an opportunity to pursue higher education for want of financial support. The financial assistance should be provided to the poor and needy to undertake higher education. In this context that the study is undertaken so as to understand the issues related to education loans in India with special reference to the state of Punjab. Therefore, this study is an attempt to advancing our knowledge for examining various problems encountered by the students while availing loan.