Economic growth of every country to a great extent depends upon education level of the country. Higher education enrolment ratios and higher GDP per capita are strongly correlated. India’s higher education  system is the third largest in the world and is rapidly growing over the years. But unfortunately, there are several issues and challenges like access, equity, efficiency and excellence in higher education which has to be tackled efficiently (Prakash, 2007). Out of these, access can be achieved only if higher education is affordable to all. To make it accessible and affordable, IBA (Indian Bank Association) prepared a Model Educational Loan Scheme in the year 2001 which was recommended to banks for implementation by Reserve Bank of India. This education loan scheme is gaining popularity now a day. With this background, the paper discusses the status of higher education and education loan in India with special reference to Punjab. Data shows that higher education institutions and enrolments are increasing with time and in line with this, percentage of education loan is also growing.