Lok Sabha Question No. 114 (UNSTARRED), answered on 2024-11-25
Subject: Burden of Loans on Students
Ministry: EDUCATION
Asked by: Shri Kodikunnil Suresh

## GOVERNMENT OF INDIA MINISTRY OF EDUCATION DEPARTMENT OF HIGHER EDUCATION

## LOK SABHA UNSTARRED QUESTION No. 114

ANSWERED ON 25/11/2024

## Burden of Loans on Students

## 114 Shri Kodikunnil Suresh:

Will the Minister of EDUCATION be pleased to state:

(a) whether the Government is aware of the increasing burden of education loans on students and their families, particularly in the context of rising education costs;

(b)  the  specific  measures  being  taken  to  address  the  challenges  faced  by  students  in  repaying their loans, including any initiatives for loan waivers or interest subsidies;

(c) whether the Government has any plans to enhance scholarship programmes, particularly for marginalized and economically disadvantaged students, to promote access to higher education;

(d) the current status of existing scholarship schemes, including their reach and effectiveness in supporting students from underprivileged backgrounds;

(e) whether the Government has consulted Educational Institutions and student organizations to assess the needs and gaps in current loan and scholarship programmes; and

(f) the anticipated outcomes of these initiatives on increasing enrollment rates, reducing dropout rates, and improving overall educational equity for marginalized students across the country?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF EDUCATION (DR. SUKANTA MAJUMDAR)

(a) to (f) Education  Loans  to  students  are  provided  by  the  banks  under  the  Model Education Loan Scheme of Indian Banks' Association (IBA). The scheme was last revised in 2022.The details are available at https://www.iba.org.in/retail-banking/educational-loanscheme.html.  To  ease  the  burden  of  loan,  Interest  is  computed  at  simple  annual  rate  on  the outstanding  principal  amount  of  education  loan  during  moratorium  period  (course  period  plus one year). Further, repayment can be done upto 15 years after the moratorium period.

Further,  the  Union  Cabinet  on  06.11.2024  has  approved  the  PM-Vidyalaxmi,  a  new  Central Sector scheme to provide financial support to meritorious students of Quality Higher Education Institution  (QHEIs).  Under  the  PM  Vidyalaxmi  scheme,  any  student  who  gets  admission  in

QHEIs  will  be  eligible  to  get  collateral  free,  guarantor  free  loan  from  banks  and  financial institutions to cover full amount of tuition fees and other expenses related to the course. Further, under PM-Vidyalaxmi, a 3% interest subvention support during moratorium period will be given every year to one lakh fresh students having an annual family income of up to Rs. 8 lakhs and not eligible for benefits under any other government scholarship or interest subvention schemes.

In addition, Ministry of Education provides student financial aid in the form of interest subsidy on  education  loans  for  technical  and  professional  courses  in  India  under  the  Pradhan  Mantri Uchchatar  Shiksha  Protsahan  (PM-USP)  Central  Sector  Interest  Subsidy  Scheme  (CSIS).The guidelines are available at https://www.education.gov.in/scholarships-education-loan-4.

The Government is implementing various scholarship schemes for marginalized and economically  disadvantaged  students.  The  details  of  these  schemes  including  the  number  of slots, assistance offered and eligibility criteria are available in the following websites:

|   Sl. No. | Ministry/ Department                      | Website links                                                                         |
|-----------|-------------------------------------------|---------------------------------------------------------------------------------------|
|         1 | Department of Higher Education            | https://www.education.gov.in/pm-usp- scholarships-education-loan                      |
|         2 | University Grants Commission              | https://www.ugc.gov.in/Home/student_Corner                                            |
|         3 | All India Council for Technical Education | https://www.aicte- india.org/bureaus/rifd/Scholarship-Schemes                         |
|         4 | Ministry of Social Justice &Empowerment   | https://socialjustice.gov.in/scheme-cat                                               |
|         5 | Ministry of Tribal Affairs                | https://tribal.nic.in/ScholarshiP.aspx                                                |
|         6 | Ministry of Minority Affairs              | https://www.minorityaffairs.gov.in/show_content .php?lang=1&level=2&ls_id=661&lid=823 |
|         7 | Department of Science and Technology      | https://dst.gov.in/inspire-scheme-innovation- science-pursuit-inspired-research       |

The  above  mentioned  scholarship  schemes  are  spread  across  the  country,  and  the applicants  from  underprivileged  backgrounds  can  avail  the  benefits  of  the  scheme  as  per  the scheme's eligibility  conditions  and  norms.  Consultation  with  stakeholders,  namely  students  & educational institutions  is  a  continuous  process.  The  schemes  envisages  that  no  deserving  and meritorious  student  is  denied  the  opportunity  to  pursue  higher  education  because  of  financial constraints.