There has been much confusion about the education loan waiver, if it is there or not for students and how to apply for it. Although the government had announced such a plan, people have been finding it difficult to submit their claims.
In order to alleviate this burden, Canara bank is acting as a gateway to help candidates who had availed the loan to apply for the interest subsidy. "Students who avail education loan from government-owned banks can submit a request to claim interest subsidy from Canara Bank", a top official said on Friday.
What did the HRD Ministry advise?
"The Ministry of Human Resource Development has recently advised Canara Bank to open the web portal for banks to submit their claims for interest subsidy on education loans between August 23 to November 23," K. Srinivasan, convenor of Education Loan Task Force (ELFT) and a former banker.
The ELTF guides students on rules and regulations governing education loans offered by nationalised banks.
According to Srinivasan, several bank branches did not submit their claims and as a result the students were not given the interest subsidy.
How to apply for educational loan interest waiver?
"On their part, the borrowers can also send a letter to the bank branches where they have taken the loan with necessary details to claim the interest subsidy along with a copy marked to the bank's Zonal Manager."
"It is enough if the parents submit the income certificate signed by the competent authority at the time of availing the loan. As per the central government's scheme, full interest subsidy to eligible students are provided during the study period plus one year moratorium period," the official said.
"If any bank fails to submit the claims in time for eligible student borrowers, the students can seek legal remedy through District Consumer Disputes Redressal Forum for deficiency of service claiming damages and compensation. Students can also approach the Banking Ombudsman for redressal of grievances."
The Indian Banks' Association (IBA) has also directed banks to provide training to its employees handling education loan in submitting claims on time without any error, it is learnt.
What is the interest subsidy scheme?
Under the interest subsidy scheme, the central government would reimburse the banks the interest due on the loan amount till the end of one year from the date of completion of the course, or six months from the date on which the student lands a job.
"The Centre would reimburse the interest to those students whose parental income is less than Rs. 4,50,000 per annum, and on loans which are available only for professional and technical courses and not for arts or science and students of diploma courses," he added.
Canara bank's role
Canara Bank is the nodal bank for the education loan interest subsidy scheme. It also has special web portal catering to the service. Other banks have to submit the interest subsidy claims to Canara Bank.