New Delhi, Aug 27 (ANI): The Government has approved a scheme to provide full interest subsidy during the period of moratorium on loans taken by poor students from scheduled banks under the Educational Loan Scheme of the Indian Banks' Association for pursuing any technical and professional courses.
The Indian Banks' Association (IBA) had formulated a comprehensive model educational loan scheme for adoption by all banks, aimed at providing financial support from the banking system to deserving/meritorious students for pursuing higher education in India and abroad.
One of the major concerns of the Government is to ensure that nobody is denied professional education because he or she is poor.
The scheme would be applicable for studies in technical and professional courses in India.
The interest subsidy will be linked with the existing Educational Loan Scheme of IBA and restricted to students enrolled in recognized professional courses (after Class XII) in India in Educational Institutions established by Acts of Parliament, other Institutions recognized by the concerned Statutory Bodies, Indian Institutes of Management (IIMs) and other institutions set up by the Central Government.
Under the Scheme, interest payable by the student availing of the Educational Loan Scheme of the Indian Banks' Association for the period of moratorium (i.e. course period, plus one year or six months after getting job, whichever is earlier) as prescribed under the Educational Loan Scheme of the Indian Banks' Association, shall be borne by the Government.
After the period of moratorium is over, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Educational Loan Scheme and as may be amended from time to time.
The benefits under the Scheme would be applicable to those students belonging to economically weaker sections, with an annual income upper limit of Rs. 4.5 lakh per year.
The interest subsidy under the Scheme will be available to the eligible students only once, either for the first undergraduate degree course or the post graduate degrees/diplomas. Interest subsidy shall, however, be admissible for combined undergraduate and post graduate courses.
Interest subsidy under this scheme will not be available for those students who either discontinue the course midstream, due to any reason except on medical grounds, or for those who are expelled from the Institutions on disciplinary or academic grounds.
The National Minorities Development and Finance Corporation (NMDFC) has an Educational Loan Scheme for individual beneficiaries, which is implemented through State Channelizing Agencies (SCAs).
The national Safai Karamcharis Finance and Development Corporation under the Ministry of Social Justice and Empowerment also provides educational loan to the students of the target group for higher education. Interest on Educational Loan provided under these two schemes shall also be subsidized for the period of moratorium.
Modalities for implementation and monitoring mechanism will be finalized in consultation with the Canara Bank. There would be a tag/marker on the degree of the student indicating his repayment liabilities.
The scheme will be applicable from the academic year 2009-2010.
The scheme is expected to ease the financial burden on the target group of students to pursue technical and professional studies (after Class XII) in recognized institutions in India and thereby increase their access in these streams of education.
This scheme will benefit about five lakh students in getting technical and professional education. (ANI)