Sivaganga, May 8: In a big boost to the students from economically backward classes aspiring to pursue higher studies, the government has approved interest subsidy on education loans sought by them.
The government had recieved a recommendation of the Indian Banks' Sammelan to provide subsidy on education loans to students from poor backgrounds.
The government has accepted the recommendation and a letter in this regard has been received from Finance Minister Pranab Mukherjee, informed MA Siddique, special Secretary to home Minister P Chidambaram in a statement.
On receiving complaints from educational loan beneficiaries that they were forced to pay interest and penal interest by banks from which they had taken the loans, the Home Minister contacted Mr Pranab Mukherjee.
The finance minister informed P Chidambaram that the Sammelan's recommendation to provide interest subsidy on education loans, the release added.
Informing that certain rules had been framed for interest subsidy on education loans, Mr Siddique said that subsidy would be given to eligible candidates from 2009-10.