The Delhi government has introduced a scheme to enable students avail education loan of up to Rs. 10 lakh. The scheme was kickstarted by Deputy Chief Minister and Education Minister Manish Sisodia by distributing cheques to the first 25 beneficiaries. About 30 students were issued sanction letters to whom cheques would be issued subsequently.
During the inaugural function, cheques worth Rs. 75 lakh in total and sanction letters were distributed to eligible students. "The government is there to help the students, whose parents don't have property as a guarantee to avail loan for their education," the minister said.
"We will take their guarantee and give them a chance to study and not let finance become a hurdle in their education," he added.
Speaking about the new education loan scheme, Mr. Sisodia said many students discontinue studies due to the non-availability of education loans. Students, who have cleared Class 12, would be eligible for the loan meant for higher studies. Children of Delhi government employees or officials/government servants posted with Delhi government were also eligible under the scheme.
The education loan will cover the expenses of course fee, library/lab fee, purchase of books, equipment, instruments, uniforms, computer, reasonable boarding and lodging. Rate of interest to be charged in this scheme is base rate plus 2 percent, the Delhi government said in a statement.
There is no restriction regarding the students' age. According to the scheme, a collateral or third party would not be required to avail the loan. The student would get a one-year moratorium after completion of his or her degree course. He or she would be expected to repay the loan through EMIs over 15 years.
The Minister also said that the success of the scheme depends on the commitment of students to repay the loan. "We take the guarantee of those students who fail to get a job despite higher education. But this trust will break if students do not repay even after getting jobs," he added.
Mr. Sisodia said that the guarantee would be available for loans for courses of government as well as private self-financed institutions located within Delhi. Under the scheme the students of the institutions of technical/skill development courses like World Class Skill Centre will also be eligible. The institutions should have NAAC/NBA/SFRC grading.
The bank may provide one percent interest concession, if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment, says the Delhi Government.