Higher education costs in Bangladesh have risen 68% since 2019 while household incomes grew 22%. Using University Grants Commission data, education ministry budget documents, and student loan repayment records, we investigate the growing affordability crisis in Bangladesh's tertiary education system.
- ▸> University Grants Commission (UGC) data shows that average annual tuition and fees at public universities rose from Tk 12,800 in 2019 to Tk 21,500 in 2025 — a 68% increase.
- ▸At private universities, which now enroll 42% of all tertiary students, average costs rose from Tk 125,000 to Tk 198,000 over the same period.
- ▸However, the UGC estimates that 420,000 students require financial assistance annually, meaning the programme reaches only 9% of the need population.
- ▸The loan terms are generous by market standards: 2% annual interest with repayment beginning six months after graduation over a 10-year term.
- ▸The maximum loan amount remains Tk 60,000 per year — unchanged since 2017, despite a 47% increase in average university costs.
Access to higher education in Bangladesh has expanded dramatically — the gross enrolment ratio rose from 13.4% in 2015 to 23.8% in 2025 — but the financial architecture supporting that expansion has not kept pace. As university costs rise and public funding lags, the burden has shifted to households, creating a growing access gap between income groups.
"University Grants Commission (UGC) data shows that average annual tuition and fees at public universities rose from Tk 12,800 in 2019 to Tk 21,500 in 2025 — a 68% increase. At private universities, which now enroll 42% of all tertiary students, average costs rose from Tk 125,000 to Tk 198,000 over the same period.
The Student Loan Landscape
The primary government student loan programme, administered by the Department of Social Services under the Ministry of Social Welfare, disbursed Tk 187 crore ($17 million) in FY2025 — reaching approximately 38,000 students. However, the UGC estimates that 420,000 students require financial assistance annually, meaning the programme reaches only 9% of the need population.
The loan terms are generous by market standards: 2% annual interest with repayment beginning six months after graduation over a 10-year term. However, the loan value has not kept pace with cost inflation. The maximum loan amount remains Tk 60,000 per year — unchanged since 2017, despite a 47% increase in average university costs.
Microcredit in Education
In the absence of adequate government programmes, a parallel system of education microcredit has emerged. The Palli Karma-Sahayak Foundation (PKSF), the apex microcredit regulator, reports that 14 microfinance institutions (MFIs) operate education loan programmes, disbursing a combined Tk 312 crore ($28.4 million) in FY2025. These loans carry interest rates of 12-18% per annum — significantly higher than the government programme but more accessible in rural areas.
The Default Crisis
Government student loan repayment rates have declined sharply. The Department of Social Services reports that the portfolio at risk (90+ days overdue) reached 38% in FY2025, up from 22% in FY2020. An internal assessment identified two primary causes: graduate unemployment (the UGC estimated 22% of tertiary graduates were unemployed or underemployed 12 months after graduation) and weak collection infrastructure (the DSS has 12 loan recovery officers for 64 districts).
Impact on Access
A 2025 study by the Centre for Policy Dialogue (CPD) found that tertiary education access is highly correlated with household income. Students from the top income quintile are 4.7 times more likely to enroll in university than those from the bottom quintile — a ratio that has widened from 3.2 in 2015. The primary barrier cited by low-income households is cost (74% of respondents), followed by opportunity cost of forgone income (18%).
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