Students Accuse Bengaluru EdTech Firm of Taking Loan on Their Names

Students Accuse Bengaluru EdTech Firm of Taking Loan on Their Names

Bengaluru-based private ed-tech firm faced a major backlash as students from various states accused the company of cheating. The city witnessed a wave of protests as students alleged that the company, CareerLabs had cheated them by availing loans in their names but failed to fulfil their promise of providing job opportunities after completing the internship-based hiring programme, reported The Indian Express.

CareerLabs had introduced an internship-based hiring initiative aimed at training candidates in different skills, followed by employment opportunities after the completion of six months. To be a part of the programme, students were required to pay a ‘refundable’ security deposit of Rs 3,000.

The students claim that the company borrowed funds from multiple financial institutions in their names, supposedly to cover training and stipend costs. They were also asked to sign an agreement for the EMI (Equated Monthly Instalments) process to repay the loans. The students were allegedly asked to pay Rs 2,239 EMIs. The EMI amount was then deducted from their stipend during the training period.

However, matters became troubling when certain students were asked to sign another agreement, stating that they would have to pay Rs 50,000 plus the stipend received till that month if they chose to leave during the training period. The students further claimed that the security deposit of Rs 3,000 would not be refunded if they discontinued the internship.

A protesting student voiced their grievances, saying that Pratian Technologies, a partner company in the programme, did not provide them proper training. They claimed adding that students only receive a few debugging tasks and recorded videos on their website, Skillassure, without any feedback on assessments.

The news outlet’s report quoted another student who said that they just want CareerLabs to “bail us out of the crisis.” The protesting student said that they cannot pay back the loan as they have not gotten the promised jobs. Apparently, the students have been receiving messages from the banks asking them to repay the EMIs.

A police complaint was also filed by the students against the firm at Koramangala police station. In response to the allegations and protests, CareerLabs assured the students that they would help them by approving the cancellation of loans obtained from multiple financial institutions. The firm has requested two days’ time to finalise the cancellations of loans. CareerLabs’ director, P N Santosh, even claimed to have initiated the process with the loan vendor and asked the students to sign an agreement stating that there will be no issues from either side in exchange for loan cancellation.

Santosh further stated that they had selected around 500 students through campus placements, with close to 150 of them secured jobs after completing the internship.

The finance head, Poornima Shetty, acknowledged that they had taken the loan. She said that according to the agreement, the students were required to pay the loans in the form of monthly instalments which were deducted from their stipend. She added saying that the students, however, wouldn’t be liable to pay if they did not get a job and cut ties with the firm. In such cases, a ‘no objection certificate’ would be issued to the concerned students.

On the other hand, CareerLabs clarified internally to the portal that the cancellation of programme loans was subject to agreement from NBFC (Non-Banking Financial Company) partners. The firm said that they were working towards resolving the issue and emphasized that there was no intention to cheat or scam students.