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 2018-07-29
Hii, plz suggest me What higher studies options are available after completion of MBBS in Jaipur?
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0 # Jagan 2018-07-30
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 2018-07-22
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 2018-07-23
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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0 # Nishith 2018-06-17
Hello, i have completed 12th with 92% marks, now i want to take admission in best engineering college in Balrampur, plz share the list
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0 # Mukesh 2018-06-18
Hii, You secured very good percentage, you can get best engineering college, plz check here Engineering in Balrampur
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0 # Rohan Older than three months
Hello Sir, May I know the specialisation in MBA and also suggest some good B-Schools in Patna ?
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0 # Jagan Older than three months
There are various specialisation in MBA i.e. Marketing, Finance, Human Resource, etc, find some good MBA colleges Punjab Technical University - Patna ; Magadh University ; Imam College Of Business Management & Science ; Centum Learning Limited - Patna
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0 # Vivaan Older than three months
Hii, I am from Shillong let me know, What is the need of NEET Phase II?
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0 # Shruti Older than three months
If a phase I test taker of Shillong oe other places is not satisfied his/her performance in the test or if a candidate has missed out to apply for NEET, he/she can apply for phase 2 exam, It is a second chance provided to aspiring candidates.
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0 # Aarush Older than three months
I belong to East Singhbhum, plz tell me As per 2016 ranking, which is the best MBBS college in India
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0 # Pallavi Older than three months
The first position is held by Delhi AIIMS, followed by Vellore’s Christian Medical College, AFMC, Pune, Maulana Azad Medical College, Delhi and the fifth position is held by the GGMC & SIR J.J. Hospital in Mumbai, you can also find some good colleges in East Singhbhum- M G M Medical College
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0 # Himmat Older than three months
Hii, I am from Panna, 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 Older than three months
hii, good to see that you are from Panna, 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 # Lakshay Older than three months
Hii, I am from Dumka, plz tell me Is there any provision that one can pursue any other management degree or diploma in IIMs without appearing for any entrance test ?
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0 # Shruti Older than three months
No, for getting admission in IIMs for management course, you should have to clear entrance exam, but there are many other MBA colleges in Dumka where without entrance you can take admission
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0 # Nishith Older than three months
Hii, I am from East Sikkim, plz tell me What is the difference between NEET and AIPMT for MBBS Admission?
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0 # Mukesh Older than three months
Both NEET and AIPMT are conducted for admission to MBBS and BDS Courses, NEET is national level test, while AIPMT is conducted by CBSE for admission to these courses in government medical and dental colleges of all places including East Sikkim
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0 # Rohan Older than three months
Hello, I am from Giridih I have secured 8,000 rank in NEET, plz let me know whic college I can get
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0 # Jagan 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 Giridih.
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