Govt to back poor students' higher edu loans

New Delhi: The nuclear deal almost done, the UPA has now decided to look into other areas of administration.

So the focus has shifted to education and the UPA government's long standing proposal to provide cheaper education loans to students for higher education will be considered by the union cabinet on Thursday.

Students going in for loans to sponsor their higher education have almost been taxed to death under the pressure to repay.

Their first brush with EMIs begins with their first salaries and with steep rates of interest and huge sums to pay, it proves to be a burden when one is just trying to find one's feet in the economic domain.

" I will have to pay at an interest of 13 per cent and that too just as I start my job," said Ankit, a student of MBA at the IIPM.

Also, there are those who cannot get such loans and those who are scared away by the steep rates of interests.

The UPA has come up with a scheme that will enable the students to obtain the education loan.

The scheme aims to for soften education loans for professional courses in IITs and IIMs and provide the loan facility for education programmes only in India.

The interest rates would be softened during the moratorium period till after the student completes his education and lands a job.

The project is being framed keeping in view the massive expansion being planned in higher education in the 11th five year plan.

Thirty new central universities and many more IITs and IIMs will be established across the country, increasing access for many more into the premier professional and degree courses.

The scheme is for all students, annual income being the only criteria. So all those aspiring for higher education and whose parents earn less than Rs 2.5 lakh per month can avail of this facility.

A total of Rs 4000 crore will be spent on the scheme over the next five years. The government could also stand counter guarantee for the loans taken by students whose parents can not convince banks that they would be able to return the loan amount.

The scheme is valid for all the loans taken from banks under the Indian Bank Association.

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