Implement interest subsidy on edu loans: Govt

Updated on: Tuesday, June 15, 2010

Unhappy over the delay in implementation of an interest subsidy scheme on education loans for poor students, government today convened a meeting of scheduled commercial banks and sought to know the problems faced by them in carrying out the scheme. The banks wanted to know students of which type of institutions would get the benefit. They also wanted to know whether students of the blacklisted deemed universities would get the benefits.

HRD Ministry officials clarified the doubts of the banks and asked them to implement the scheme soon. The Ministry had earlier directed all banks to implement the scheme on education loans for poor students pursuing higher studies. The scheme is effective from the academic year 2009-10. For 2010-11, the government has made a provision of Rs 500 crore for the scheme. However, it is yet to be implemented on ground.

According to the scheme announced in last year's Budget, students from the weaker section will be exempted from paying interest on education loans during the moratorium period. Moratorium period is defined as course period plus one year or six months after getting job, whichever is earlier, as prescribed under the Educational Loan Scheme for the Indian Banks Association.

The subsidy scheme will cover loans taken by such students from scheduled banks to pursue any approved course in technical and professional streams at recognised institutes in the country. However, only those students whose family income is less than Rs 4.5 lakh per annum will be eligible under the scheme.

Implement interest subsidy on edu loans: Govt

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