Finance Ministry

Waiver of education loans of poor-middle class family students who could not get employment-Govt denies such plans-Press release

Waiver of education loans of poor-middle class family students who could not get employment-Govt denies such plans-Press release

Ministry of Finance

25-November, 2016

Write off education loans given to the poor and middle class family students who could not get employment
Government has no Plan to write off education loans given to the poor and middle class family students who could not get employment. However, for the students belonging to economically weaker sections, an interest subsidy scheme on educational loans is in place. Under the scheme during the period of moratorium full interest subsidy is available for educational loans disbursed on or after 1st April, 2009.

The Indian Banks’ Association (IBA) has formulated a Model Educational Loan Scheme for adoption by banks. As per the scheme, Banks may also provide additional moratorium upto 6 months at a time taking into account spells of under-employment/unemployment during the tenure of the loan.

Government of India has launched a Credit Guarantee Fund Scheme for Education Loans (CGFSEL) wherein collateral free loan is given upto Rs.7.5 lakh. The fund provides guarantee against default in repayment of education loans to the extent of 75% of the amount in default.

This was stated by Shri Santosh Kumar Gangwar, Minister of State in the Ministry of Finance in written reply to a question in Lok Sabha today.

*****

DSM/KA
(Release ID :154365)
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