New Delhi: Nearly 900,000 students stand to benefit from a subsidy scheme on educational loans taken before March 31, 2009, according to the interim budget proposals presented by Finance Minister
P Chidambaram yesterday.
According to the budget presented in the Lok Sabha, Rs26bn will be provided in the current fiscal for payment of outstanding interest liability for the period till December 31, 2013.
“I have noticed a sense of discrimination among students who had borrowed before March 31, 2009, struggled to pay interest during the period of study, and continued to service the loans afterwards. I think they deserve some relief,” the finance minister said in his speech.
He said the interest subsidy scheme was introduced in 2009-10 for education loans disbursed after April 1, 2009, while students who had borrowed prior to that date deserve some relief.
He said the government will take over the liability for outstanding interest till December 31, 2013, but the borrower would have to pay interest for the period after January 1, 2014.
“A sum of Rs26bn will be provided in the current financial year itself and this amount will be transferred to the Canara Bank,” Chidambaram said.
“It is estimated that nearly 900,000 student borrowers will benefit to the tune of approximately Rs26bn,” he added.
He further said that 10 years ago, only a few thousand students, mostly the well-connected, got education loans.
According to him, the education loan portfolio of nationalised banks as of December 31, 2013, stands around Rs577bn in 2,570,254 accounts.
IANS
