Government mulling schemes that will allow collateral free bank loans for higher education
October 13th, 2007
Following is an excerpt on this from a report in Hindu by Anita Joshua:
The Union Human Resource Development (HRD) Ministry will soon be approaching the Cabinet Committee on Economic Affairs with a proposal to offer loan subsidies to students below the “creamy layer” in a bid to ensure access for all to professional education.
As per estimates, this subsidy will cost the exchequer Rs. 3,250 crore over the XI Five Year Plan. All students hailing from families with an annual income below Rs. 2.5 lakh will be eligible for the loan subsidy irrespective of whether they hail from the general category or the reserved categories.
The interest rate on education loans now runs into double digits; upwards of 12 per cent for amounts up to Rs. 4 lakh and it increases as the loan amount goes up. The Ministry proposes to allow students to avail themselves of loans at around 4 per cent irrespective of the market rate. The difference will be subsidised from the Ministry’s budget.
This facility will be allowed only to students seeking admission to professional courses offered by recognised institutions; both government and private. …
Students will have to begin repaying the loan only after one year of completion of the course or on getting a job; whichever is earlier. The pay back schedule can be worked out as per the paying capacity of the borrower, although Ministry officials said details were yet to be finalised with banks.
The government will facilitate the loans by standing guarantor so that the students will not have to provide any collateral. … The Ministry’s position is that it is necessary to move to a system where banks will lend freely to students who have got admission to certified institutions against a loan guarantee given by the government.
The Ministry is also working on a proposal to set up a National Student Loan Guarantee Corporation to facilitate university financing via the students. The Prime Minister’s Office is also understood to have evinced an interest in this scheme.
Entry Filed under: Educational Loans
3 Writeup
1. student | August 31st, 2008 at 5:13 pm
Sir,
I want an education loan with free of interest. I am studying in govt. Engg.college for this year onwards. I have read the article about it.But when I was trying to get the website I am unable to get the application form.
I also went to the banks listed above, they said noting about it.
It is the problem of all the students.
Yours obediently,
student.
2. Sheikh Sadaquat Hossain | August 14th, 2009 at 11:50 am
Sir,
I have gained admission to University of Liverpool for Engineering Honours of a duration of 4 years.I have applied to various banks for a loan of 15 lakh ruppees but the illogical conditions of the banks have not approved the loan.I am providing them with a collateral security of immovable land equivalent to the amount of loan but they want the documentary proof of the remaining funds available for my expenses.If my dad would have had around thirty to thirty-five lakh ruppees with him then why would he apply for an educational loan.I would like to know about the details of the HRD Ministry so that I can approach them to stand as guarantee for my loan.How do I complete my course is my and my parents problem why does the bank need to create a fuss about this ? Inspite of gaining admission to having a world-class education abroad, I have slog it out over here.The starting salary for engineers in UK is around 1.5 lakh ruppees per month.
Yours obediently,
Sheikh Sadaquat Hossain
3. satyanarayan karan | August 30th, 2009 at 8:21 pm
dear sir,
I am a junior Engineer now working at jamshedpur, I am completing my diploma in automobile engineering at the session 2003-2006. now I like to complite my graduation in Mechanical Engineering in Odisa .can I have any option to have a study loan?so many times I am trying to have it but facing problems can I have any other option to have the study loan