That's 17 out of 20 in default - a massive 85%. Some of them were actually not in a situation where they could pay back the loan. Others didn't want to. This was the situation at that single bank branch. Don't want to imagine how large the total default amount must be.
Of course, graduating from a good university here meant a lot more fees.
Unfortunately, and it is something that I really hate is that, the education loan system in India can really use an update - at least in terms of the loan amount that is offered to prospective students. As the bankers told me, there is a limit of roughly 25K USD that can be allowed for education within India. For those who want to get the loan for international programs, the limit is roughly 33K USD.
Now, for local education, that is a decent amount, though might not be sufficient in many cases. For international education, it is NOT sufficient. This restriction applies to government banks and they usually follow it.
Private banks have made a lucrative business out of this, and offer much larger loans to students at nasty, and often floating, interest rates (17% or so would be average.)
That becomes a hell of a loan to pay back even if you are earning in USD and returning in INR.