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Need for Education subsidy in promoting the Education System in India?

Education Subsidy

Education has a pivotal role in impacting the quality of life in a positive direction and helping us develop the necessary abilities while also supporting the development of our personalities and attitudes. Education plays a major role in influencing people’s employment choices. People with extensive education typically have a better chance of finding a respectable job. Education is what sets humans apart from other earthly creatures. This has led to a man becoming the most intelligent creature on earth. It empowers humans and helps them prepare for life’s challenges.

Most of the world has changed its education system due to the availability of free higher education. Governments from different regions adopt this practice to boost their economies by raising the literacy and competence levels of their citizens. Governments from different regions adopt this practice to boost their economies by raising the literacy and competence levels of their citizens. The problem with the higher education system is the affordability as everyone can’t afford higher education and it is where the role of the Government comes in reducing the gap between the rich and the poor, by providing subsidised education.

The government looks after the educational needs of our students, starting with those of the economically disadvantaged groups and extending to those who are pursuing higher education in India and overseas.

The upcoming years would see economic expansion fuelled by knowledge and technology. The country needs a lot of technically and professionally prepared people to keep up with the current rate of economic growth. Loans for education are viewed as investments for economic growth and prosperity against this background. The Indian Banks’ Association created the model Education Loan Scheme to assist deserving students in pursuing higher education in technical and professional fields. The loan is intended to be repaid with future earnings from the student when they have finished their study because the emphasis is on the development of human capital. Therefore, the loan assessment will be focused on the student’s employability and earning potential after the course.

Let’s discuss the Credit Guarantee Fund Scheme for Education Loans.

This programme is designed for student borrowers who cannot guarantee their loans with a third party or pledge any collateral as security for their loans. Bank education loans made under the Model Education Loan System of the Indian Banks’ Association are guaranteed by the credit risk guarantee fund scheme. A student can obtain a 7.5 lakh INR loan under this programme without putting up any collateral and without the need for a third-party guarantor. To take advantage of this programme, a few requirements must be met. These requirements are as follows

After completing Class XII, acquired admission to any of the eligible technical or professional stream programmes at accredited Indian universities.

The student must come from an economically disadvantaged family and have an annual gross family income of no more than Rs. 4.5 lakh.

What are all the eligibility Conditions for availing of the Scheme?

The Credit Guarantee Fund Scheme’s education loans are available to students who meet a few requirements. The following criteria apply:

The student must fall under the EWS (Economically Weaker Section) classification.

The household should make less than INR 4.50 lakhs annually.

A reputable university, either in India or overseas, should have accepted the student. After Class XII,

They should have been admitted to a recognised technical or professional programme.

Students are required to show formal government-designated verification of their income.

For loans up to 7.50 lakh rupees, there is a subsidy (even if a loan is more than Rs.7.50 Lakhs).

Students will only be qualified for interest subsidies once for either their first undergraduate degree programme or their first postgraduate degree or certificate programme in India.

Only for the course’s and the moratorium’s duration.

According to RBI regulations, the interest rate that the bank charges for education loans that will be covered under CGFSEL may be increased by a maximum of 2% annually over the Repo Linked Lending Rate (RLLR) or any other external benchmark rate. The Fund may, however, adjust this cap on an ongoing basis while taking into consideration the current

Students must provide proof of their income from the official appointed by the government.

There is a subsidy for loans up to 7.50 lakh rupees (even if a loan is more than Rs.7.50 Lakhs).

Students will only be qualified for interest subsidies once for their first undergraduate degree programme or their first postgraduate degree or certificate programme in India.

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