Education loans to get cheaper

Education loans to get cheaper


Education loans are expected to become cheaper. The government is planning to pay the interest for the duration of the academic programme for which the student has taken the loan. The government is considering a proposal where between joining a course and its completion will be a moratorium period, during which the student will not have to pay interest. This will significantly bring down the EMIs. The proposed interest rate subsidy from the government will also benefit banks which have been complaining of defaults.

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and non-payments on education loans. It is estimated that around 2-3 percent of education loans have turned sticky. So far, the public sector banks have given Rs 32,000 crores in education loans to 16.99 lakh students.

Typically, a student starts paying his EMI a year after completing his studies. One year moratorium is aimed at giving students time to search for a job. Under the proposal being considered by the government, if the education loan is for seven years, which includes two years of study and a moratorium of one year, the interest cost for the first three years would be borne by the government while the student has to repay the principal and interest components for the remaining four years.

In the last budget, the finance minister had announced the government will provide an interest subsidy. The interest holiday will be given only to students whose parents jointly earn a gross income of Rs 4.5 lakhs or less. The income of parents will have to be certified by State and Central government officials. The proposed subsidy will be with retrospective effect. Thus, all students (where parents' gross income is less than Rs 4.5 lakhs) and who had borrowed last year will benefit from this. The interest rate subsidy will be for technical and professional courses offered by institutes in India.

As such, it could cover around 80 percent of the loans taken by students and may cost the government Rs 500-1 ,000 crores a year. The government is also thinking of capping the loan amount at Rs 10 lakhs. The government had appointed Canara Bank as the nodal bank for this scheme. All other state sector banks providing education loans to students will have to make a claim to Canara Bank, which will be the government's agent for distributing the subsidy money. Banks have also asked the central government to guarantee education loans, at least those below Rs 4 lakhs. Students availing education loans up to Rs 4 lakhs do not have to provide any security or guarantee. However, the government has directed state-owned banks not to reject any education loan without a good reason. Since loans below Rs 4 lakhs are perceived riskier, banks have sought a government guarantee.

In addition, the government has extended tax concession on interest paid for educational loan to all streams of studies, including vocational courses, benefiting students from all economic strata opting for higher studies, from this academic session onwards. The concession was till now restricted to graduate and post-graduate courses in engineering, medicine, and management, and postgraduate courses in applied sciences or pure sciences, including mathematics and statistics.

The latest amendment in Section 80E of the Income Tax Act will bring all the streams of education (apart from regular ones) and vocational courses under its ambit. This will benefit the students who apply for graduate and postgraduate courses in various streams during the upcoming academic session. The tax concession on such a loan will also be extended to parents who have legally adopted a child. This makes student loans cheap and easily available.

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Comments

0 # Jayesh 2018-12-23
Hii , I am from Dumka,Can anyone tell me about complete selection procedure about IITs and NITs and at which time exams for these are conducted?
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0 # Pallavi 2018-12-24
Hello, good to see that you are from Dumka, for IITs and NITs, you have to give entrance exam, For NITs JEE Main is the entrance exam and for IITs JEE Advanced is the entrance exam
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0 # Priyansh 2018-11-25
Is there any entrance test for B. Ed course, can you plz suggest good colleges in West Garo Hills
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0 # Shruti 2018-11-26
Different states in India conduct different entrance exam for admission in this course, These entrance tests generally test the language & proficiency, subject knowledge, reasoning and general awareness and teaching proficiency of applicants, find the list of B.Ed college in West Garo Hills-B.Ed in West Garo Hills
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0 # Priyansh 2018-11-18
Hii, I am from Tirupati, I have completed 12th in science stream, looking career in engineering,Tell me about the fee details of best engineering colleges
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0 # Pallavi 2018-11-19
hii, good to see that you are from Tirupati, There are very good career opportunities in engineering, you have taken very good decision, but if we talk about fee of best colleges its depend on college to college but the range is Rs. 50,000 to 1,50,000 per year
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0 # Aayush Older than three months
Hello, I want to make career in engineering but so confused about its branch, Please suggest me the best branch which would have good scope in future, also suggest good colleges in Hingoli.
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0 # Pallavi Older than three months
You should take branch according to your interest, if you have interest in software or programming choose computer science, if you have interest in machines, choose mechanical, etc, some good engineering colleges are Shri Dhaneshwari Manav Vikas Mandal - Dr VK Patil Engineering College ; Geetai Charitable Trusts Khurana Sawant Institute of Engineering and Technology
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0 # Nishith Older than three months
Hello sir, I am 3rd year B.com student, I want to pursue MBA from Uttarkashi,Please suggest top B-School over there.
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0 # Shruti Older than three months
Hello, after b.com, MBA will be the right career option, you can find here the list of good B-Schools in Uttarkashi- MBA in Uttarkashi
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0 # Rohan Older than three months
Hello, I am from Dindori, plz tell me Is there an any degree equivalent to MBA and of same weightage in terms of placement
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0 # Jagan Older than three months
Hii, PGDM is equivalent to MBA, you can do PGDM from any good college of Dindori, so you can get placement easily
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0 # Rohan Older than three months
Hello, I am from Vaishali I have secured 8,000 rank in NEET, plz let me know whic college I can get
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0 # Pallavi Older than three months
Hii, for finding MBBS college you can go through mock counselling , please visit here- mock counselling, you can also get good MBBS college in Vaishali.
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0 # Lakshay Older than three months
Hello. I am from Pratapgarh, plz tell me What are the points to consider for selecting a B. Ed college?
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0 # Shruti Older than three months
You should consider the fee structure and if you consider doing this course from other place except Pratapgarh, you should consider hostel facilities, you shouldalso consider whether the subject in which you wish to continue this course is available in the college.
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0 # Jayesh Older than three months
Hii, plz suggest me What higher studies options are available after completion of MBBS in Jaipur?
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0 # Jagan Older than three months
On completion of MBBS, for being specialised in a specific field, candidate will have to take up MD or MS course in Jaipur with appropriate specialization.
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0 # Aarush Older than three months
I have secured 55% marks in 12th ,I think its too low to get admission in any good engineering college in Haridwar,If you know about it please suggest me
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0 # Shruti Older than three months
yes, your percentage is very low, I will not suggest that you should choose engineering as a career, but still you want to do engineering you can try for private college in Haridwar, they will admit you.
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