The scheme launched by Education Minister Prof. C. RavindranathinKottayam comes as a major relief for students and families who were unable to repay their educational loans and faced the threat of penalties. The government has now set aside Rs 900 crore for this scheme on the basis of primary statistics. All deserving students will be included in this scheme after collecting relevant details.
The Education Loan Repayment Support Scheme will benefit students of families with income less than Rs. 6 lakh and whose educational loan is under Rs. 9 lakh. Government will repay up to 60% of the loans, amounting up to Rs 4 lakh included by banks in the list of non-performing assets. The loan borrowers need to repay only the remaining 40%. It is also stipulated that the banks should waive interest and penalty interest in this case.
As per the scheme,government will pay 90% of the amount to be paid in the first year, 75% of the amount in the second year, 50% of the amount in the third year and 25% of the amount in the fourth year for loans above Rs. 4 lakh not included in the non-performing list. The government has also announced a special package for the repayment of loans included in the list of nonperforming assets above Rs. 4 lakh.
A scheme is being envisaged to fully repay the loan amount, if banks write off interests in the case of students, who passed away after availing educational loan or going through physical and mental challenges after availing loan.