The Hindu Business Line : ‘Full interest subsidy on study loans for poor’

NEW DELHI: In a significant move, the Government on Thursday decided to provide full interest subsidy on education loans taken by poor students to pursue technical and professional courses and fixed their parental income limit at Rs 4.5 lakh per annum to avail the benefit.

A meeting of the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, Mr Manmohan Singh, gave its nod to the scheme to enable students from economically weaker sections to continue any approved course in recognised technical and professi onal institutions in the country.

The scheme would benefit over five lakh students to pursue higher education in technical and professional streams, the Home Minister Mr P Chidambaram said, adding that the number of loans as on March 31 this year was 16 lakh and the total outstanding amo unt Rs 24,000 crore.

The scheme, to be applicable from the ongoing academic year, would provide full interest subsidy during the period of moratorium on loans taken by students from scheduled banks.

The moratorium period begins from the launch of a course till one year after the course ends or six months after the student gets a job, whichever is earlier. The interest during this period would be borne by the government.

After this moratorium period is over, the interest on the outstanding loan would have to be paid by the student borrower as per its provisions. - PTI

Prev: Kharif output to fall short 15-20%: Mukherjee
Next: Cabinet clears setting up of 7 new IIMs

Business Line | NUS Index |

Copyright copy; 2009, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line