Lok Sabha Question No. 5025 (UNSTARRED), answered on 2017-03-31
Subject: Education Loans
Ministry: FINANCE
Asked by: MURALI MOHAN MAGANTI, PARAYAMPARANBIL KUTTAPPAN BIJU, PARASURAMAN K., K. KAMARAAJ

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES LOK SABHA

## UNSTARRED QUESTION NO. 5025

## TO BE ANSWERED ON THE 31 st  MARCH, 2017, CHAITRA 10, 1939 (SAKA)

## EDUCATION LOANS

## 5025. SHRI M. MURALI MOHAN: SHRI P.K. BIJU: SHRI K. PARASURAMAN: DR. K. KAMARAJ:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government proposes to providing educational loans for nonprofessional courses and if so, the details thereof;
- (b) whether the Government has received complaints against banks from the parents, students, universities, educational premier institutions regarding refusal/delay in sanctioning of  educational loans for students aspiring for admission for IITs, IIMs, Medicine and other professional educational courses and if so, the details thereof and the action taken by the Government in this regard;
- (c) whether any specific directions have been issued to banks to sanction loans to the students without any surety or restrictions and if so, the details thereof;
- (d) whether the Government has issued any guidelines for enhancement of loan upto Rs 15 to Rs 20 Lakh for engineering and upto Rs.50 lakh for medicine course; and
- (e) if so, the details thereof and if not, the reasons therefor?

## ANSWER (MINISTER OF STATE IN THE MINISTRY OF FINANCE) (SHRI SANTOSH KUMAR GANGWAR)

- (a) As per Indian Banks' Association (IBA) Model Scheme, approved courses leading to graduate/  post  graduate  degree  and  P  G  Diploma  conducted  by  Colleges/  Universities recognized  by  the  University  Grants  Commission,  the  All  India  Council  for  Technical Education,  the  Indian  Council  of  Medical  Research,  etc.  are  eligible  for  education  loan. Model education loan scheme covers recognized non professional courses.
- (b) Complaints regarding educational loans, as and when received by the Government, are taken up with banks concerned for corrective action. As informed by Public Sector Banks, during  2016-17 (upto December, 2016), 2608 complaints related to education loans were received,  out  of  which  2497  were  disposed  off.  In  order  to  facilitate  easy  processing  and disbursal  of  loans,  Government  has  launched  a web-based  portal  namely,  Vidya  Lakshmi Portal.  Students  can  view,  apply  and  track  the  education  loan  applications  online  by accessing the portal.
- (c) All education loans upto Rs 4 Lakh are collateral free as per RBI guidelines. Further, Government of India has launched a Credit Guarantee Fund Scheme for Education Loans (CGFSEL) wherein collateral free loan is given upto Rs.7.5 lakh.
- (d) & (e) As per IBA Model Scheme, Education Loan Limit is Rs 10 Lakh for studies in India and Rs 20 Lakh for abroad studies. However, Banks may consider capping stream wise/ institution  wise  cap  on  education  loan  amount  by  taking  into  account  reputation  and placement  history  of  the  education  institution  concerned.  Banks  may  consider  higher quantum of loan on course to course basis.

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