Lok Sabha Question No. 1947 (UNSTARRED), answered on 2018-07-30
Subject: Education Loan Scheme
Ministry: HUMAN RESOURCE DEVELOPMENT
Asked by: RATTAN LAL KATARIA

## GOVERNMENT OF INDIA MINISTRY OF HUMAN RESOURCE DEVELOPMENT DEPARTMENT OF HIGHER EDUCATION

## LOK SABHA

## UNSTARRED QUESTION NO.1947 TO BE ANSWERED ON 30.07.2018

## EDUCATION LOAN SCHEME

## †1947. SHRI RATTAN LAL KATARIA:

- Will the Minister of HUMAN RESOURCE DEVELOPMENT be pleased to state: (a) whether the Government is running education loan scheme for the bright future of students; (b) if so, the details of such loan scheme; (c)  the  response  of  the  banks  to  provide  education  loan  under  education  loan  scheme  for  poor meritorious boy and girl students; and (d)  the  details  of  amount  provided  separately  to  Scheduled  Tribe  (ST)/  Scheduled  Caste  (SC)
- students under the loan scheme during the last three years?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF HUMAN RESOURCE DEVELOPMENT (DR. SATYA PAL SINGH)

(a) & (b):  Education loan is provided to the students by the Scheduled Commercial Banks under the Model Educational Loan Scheme of Indian Banks' Association (IBA). The objective of the scheme is to provide financial support from the banking system to the meritorious students for pursuing higher studies in India and abroad.

Salient features of the Model Educational Loan Scheme of Indian Banks' Association (IBA):

- (i) Maximum education loan up to Rs 10 lakh for studies in India and Rs 20 lakh for studies abroad.
- (ii) No margin is required for loan up to Rs 4 lakh and for loan above Rs 4 lakh, 5% margin for studies in India and 15% margin for studies abroad.
- (iii) For  loan  above  Rs  4  lakh  and upto  Rs  7.5  lakh,  no  margin  is  required,  if  the  loan  is covered under Credit Guarantee Fund for Education Loan Scheme.
- (iv) Simple interest is charged during the study period and up to commencement of repayment.
- (v) Repayment  period  of  15  years  besides  repayment  holiday/  moratorium  period  (course period plus one year).
- (vi) Banks may also provide additional moratorium period up to six months at a time, taking into account, spells of unemployment/ under-employment, during the tenure of the loan.
- (viii)  Moratorium is provided for the incubation period if the student wants to take up a start-up venture after graduation.

The Government is also implementing the following interest subsidy schemes on education loans for higher education: -

- (i) Central Sector Interest Subsidy Scheme (CSIS): - Under the Scheme, full Interest Subsidy is  provided  for  the  moratorium  period  (course  period  plus  one  year),  on  the  educational

loan  up  to  Rs.  7.5  lakh  taken  by  students  belonging  to  Economically  Weaker  Sections (EWS) having annual parental income up to Rs.4.5 lakh, from Scheduled Banks under the Model Educational Loan Scheme.

- (ii) Dr. Ambedkar Scheme of Interest Subsidy on Educational Loans for Overseas Studies: The  Scheme  is  implemented  by  Ministry  of  Social  Justice  and  Empowerment.  The objective of the scheme is to provide interest subsidy to meritorious students belonging to Other  Backward  Classes  (OBC)  and  Economically  Backward  Classes  (EBC)  to  provide them  opportunities  to  pursue  higher  education  abroad  in  the  field  of  Arts,  Engineering, Medical and Agriculture. The income ceiling is Rs. 8 lakh per annum for OBCs and Rs.2.5 lakh per annum for EBCs.
- (iii) Padho  Pardesh  Scheme:  -  The  Scheme  is  implemented  by  Ministry  of  Minority  Affairs. Under the  scheme,  interest  subsidy  is  provided  to  minority  students  to  pursue  Master's Level Courses, M.Phil., and Ph.D. in foreign Universities in the field of Arts, Engineering, Agriculture and Medical. The income ceiling is Rs. 6.00 lakh per annum.
- (c): Banks  promote  their  Education  Loan  Scheme  across  the  country  by  displaying  their product at every branch and at important public places. Many banks also tie-up with the educational institutions and at the time of admission, set up stalls for the benefit of the students. Promotional campaigns are also carried out through print and social media.
- (d): Education  loan  disbursed  by  Scheduled  Commercial  Banks  (SCBs)  to  SC/ST  students during the last three years is as per the table below: -

| Financial Year   | No. of Accounts   |   Amount Disbursed (Rs. in crore) |
|------------------|-------------------|-----------------------------------|
| 2015-16          | 52,092            |                            490.05 |
| 2016-17          | 38,165            |                            358.45 |
| 2017-18          | 35,929            |                            335.91 |

Source: RBI

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