The government under the United Progressive Alliance (UPA) has massive plans to pursue. After signing the much awaited nuclear deal, the government now plans to focus on other areas of administration.
The extension of loans has been a singular achievement of the Government under the United Progressive Alliance and the benefits have gone to the poor, agriculturists and the middle-class. Now the government plans to give cheaper education loans to students for higher education and the union cabinet is expected to consider this project today.
The loans provided to the students demand high interest rates that amounts to big EMIs which students' start paying right from their first salaries. In this era where one is trying to sustain a living, these loans become more of a burden for ages.
Moreover, there are times when one is more worried about repayment due to high interest rates and do not take a loan. Again there are those who cannot avail such loans. The UPA government thus plans to introduce a scheme whereby students can avail cheaper education loans.
The scheme will ease education loans for professional courses in IITs and IIMs and further the loan facility will only be provided for education programmes running in India. Interest rates under the scheme will be softened for the period in which a student completes his education and till the time he steps into a job.
Earlier in September, the government had agreed to bear part of the interest cost of education loans.
In May, Arjun Singh the HRD minister had offered to provide collateral for education loans.
The 11th five year plan is also considered as the education plan of the country and this scheme is therefore outlined accordingly. Annual income is the only condition that will be considered while extending the loan. The loan will be given to students whose parents' incomes fall below Rs 2.5 lakh per month.
The government plans to spend Rs 4000 crore over the next five years under this scheme. UPA will also help students whose parents cannot stand as a guarantee in the bank's eye. The government will stand as a guarantee on behalf of such students.
The scheme is valid for all the loans taken from banks under the Indian Bank Association.
In order to boost up the higher education, making it available to a larger section and to bring it equivalent to the notable foreign universities, the Government of India has kicked off some vital initiatives in Engineering, Management, Science & Research, Planning & Architecture, and Information Technology.
Thirty new central universities and many more IITs and IIMs will be established across the country, increasing access for many more into the premier professional and degree courses.
The government has also launched interest subsidy on educational loans. This scheme is provided on educational loans taken by students belonging to economically weaker sections for pursuing professional education.
Non-creamy layer students will also be given scholarships at College and University level. The scholarship for the first two years will be Rs 1000 per month, which will be enhanced to Rs 2000 for the rest of the session. About 41,000 boys as well as same number of girls will be able to avail the benefit of this scheme.