Government to Consider Installment-Free Education Loan Proposal
The Planning Commission is considering a proposal wherein students, even graduates, can write-off their educational loans by serving for a while in a government agency.
This move, for which the details are yet to be finalized, has been made to check brain drain from the country.
The Planning Commission may set up a National Student Loan Guarantee Corporation which will provide a guarantee to students of certified institutions who avail of a bank loan. The move will enable banks to lend without collaterals.
According to the Reserve Bank of India (RBI) data, there was a 51 per cent rise in education loans from Rs 9,962 crore at the end of March 2006 to over Rs 15,000 crore at the end of March 2007.
Officials say that a mechanism for loan waiver from a private or a foreign bank, and points regarding tax treatment are yet to be framed.