Lok Sabha Question No. 1903 (UNSTARRED), answered on 2023-03-13
Subject: Education Loans
Ministry: FINANCE
Asked by: Subhash Ramrao Bhamre, Amol Ramsing Kolhe, Sunil Dattatray Tatkare, Supriya Sadanand Sule, Kuldeep Rai Sharma

## GOVERNMENT OF INDIA MINISTRY OF FINANCE

## DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION NO. 1903

TO BE ANSWERED ON THE 13 th  MARCH, 2023, PHALGUNA 22, 1944 (SAKA)

## 'Education Loans'

## 1903.   DR. SUBHASH RAMRAO BHAMRE:

DR. AMOL RAMSING KOLHE: SHRI SUNIL DATTATRAY TATKARE: SHRIMATI SUPRIYA SULE: SHRI KULDEEP RAI SHARMA:

Will the Minister of FINANCE be pleased to state:

- a) The details of the criteria and interest fixed by the Government for educational loans;
- b) Whether it has come to notice of the Government that the banks are demanding for security and surety for educational loans;
- c) If so, whether this has affected poor deserving students and if so, the details thereof along with the corrective steps taken by the Government to overcome this problem;
- d) Whether it has come to notice of the Government that the banks are levying high rate of interest for the educational loans commercial loans, if so, the action taken by the Government to reduce the rate of interest of educational loans; and
- e) Whether  the  Government  is  also  implementing  Central  Sector  Interest  Subsidy Scheme on Educational Loans and if so, number of such students who have availed benefits of the scheme in the State of Maharashtra and UT of Andaman and Nicobar during last three years and current year?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE

## (DR. BHAGWAT KARAD)

(a) to (d): As informed by Reserve Bank of India, all Scheduled Commercial Banks (SCBs) follow  the  Model  Education  Loan  Scheme,  2021  which  encompasses,  inter-alia,  broad guidelines regarding eligibility criteria, courses eligible for loan, quantum of finance, security and margin, rate of interest etc. and Banks are broadly guided by the above Scheme.

Further, as per the said Scheme, interest rate is to be charged at rates linked to the Base rate/  Marginal  Cost  of  Funds  based  Lending  Rate  /External  Benchmark  Lending  Rate  as decided by the individual banks. Banks may also charge differential interest rate based on the rating of the course/institutions.

The Department of Higher Education in the Ministry  of Education, Government of India is handling the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). As per this Scheme, the credit guarantee is provided for education loans covered under Indian Banks' Association (IBA)- Model Education Scheme for an amount upto Rs. 7.5 lakh without any collateral security and third-party guarantee.

- (e) The Department of Higher Education in the Ministry  of Education, Government of India has launched Central Sector Interest Subsidy (CSIS) Scheme to support students from Economically Weaker Sections (EWS) by way of loans for technical and professional courses for the limit up to Rs.10.00 Lakhs.

As informed by the Nodal Bank i.e. Canara Bank, the number of students who have availed benefits of the scheme in the State of Maharashtra and UT of Andaman and Nicobar during the last three years and current year are as under:

| Claim Year   | Number of Claims #   | Number of Claims #   |
|--------------|----------------------|----------------------|
|              | Maharashtra          | Andaman &Nicobar     |
| 35,757       | 67                   | 2018-19              |
| 33,071       | 54                   | 2019-20              |
| 20,497       | 31                   | 2020-21              |
| 24,753       | 32                   | 2021-22*             |

## Source: Canara Bank

# In  terms  of  percentage  share  of  the  total  sanctioned  claimed,  while  the  share  of  UT  of Andaman & Nicobar has remained around 0.01%, the share of Maharashtra has gone up from 6.71% to 9.16% between 2018-19 and 2021-22.

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