To make education accessible to all, Deputy Chief Minister and Education Minister, Manish Sisodia informed that the Delhi government is planning to launch a scheme under which students who procure education loans for higher studies, the government will stand guarantee for them.
According to the proposed Higher Education guarantee scheme, the government will stand guarantee for loan up to Rs.10 lakh for students who have completed class XII from Delhi.
The student will get a one-year relief after completing his degree or diploma course and then can repay the loan through EMIs for over 15 years.
It has been noted that banks often do not give loans to students who are from unprivileged background. So, the government has opened the scheme for students from various financial backgrounds.
According to the senior government official, the government plans to keep Rs.30 crore aside for student loans and the interest accrued may be used for repayment of loans.
The scheme is applicable to all government and private institutions with the National Assesment and Accreditation Council or the National Boar of Accreditation rating of A or B, and self-financing institutions affiliated with Guru Gobind Singh Indraprastha University with rating of A+, A or B.
Where Delhi government is bullish on giving loans to students for pursuing Higher studies, the Credit Information Bureau
(India) Ltd. CIBIL has said that the non-repayment of education loan can affect the credit score of the defaulter.
The CIBIL Transunion score is a key parameter relied on by banks while processing loan applications. According to CIBIL data, outstanding education credit within the country and abroad is around Rs.63,800 crore as on March 31, 2015.