DIGITAL BANKING AND FINANCIAL INCLUSION: A NEW FRAMEWORK FOR STUDENT LOAN ACCESS IN INDONESIA

Abstract

Access to affordable higher education remains a major challenge in Indonesia, where student loans are still rarely utilized compared to developed countries. While financial constraints continue to prevent many students from low- and middle-income families from pursuing university education, the rise of digital banking and fintech presents new opportunities for inclusive education financing. This study explores how digital banking platforms and mobile applications can support student loan schemes by offering more accessible, flexible, and technology-driven financial solutions. Through a qualitative descriptive method and literature review, the study identifies key features, benefits, and challenges of implementing digital-based student loan systems. Findings show that digital banking can help overcome traditional lending barriers such as rigid requirements and geographic limitations, while promoting financial inclusion through automation and alternative credit assessments. In light of Indonesia’s upcoming income-contingent loan (ICL) scheme, digital infrastructure, national ID systems, and tax administration improvements are expected to play a critical role in supporting sustainable implementation. The study concludes that digital banking has the potential to transform education financing into an inclusive and equitable system, but success will depend on regulatory readiness, institutional coordination, and digital literacy advancement.