This loan will be provided by banks while a proposed funding corporation for higher education will re-finance the banks to help them compensate the loss. The mandate and functioning of the proposed National Higher Education Finance Corporation (NHEFC) are now being worked out. "It (education loan at four percent proposal) is at a preliminary stage. We have discussed this idea with the Planning Commission and it is supportive," HRD Minister Kapil Sibal told PTI.
The detailed modalities are being worked out for the scheme, including the weaker section criteria. The scheme will have another component of providing loans to students at the rate of seven percent, subject to a ceiling. There will a cap on loan amount in this category. There may another provision of extending loans at nine percent without a cap on the amount.
Weaker section means it should be on the basis of annual earning of a family and it should be restricted only to two members of a family.It will give great relief to the parents and students if the same Interest is charged for the exiting students who has taken loan. Reduction of interest rate should me given for single girl child.
Other Countries Education Loan Rate:-
At times in the USA the student loans have been at 4% and frankly that's too high a percentage for students who come from poor backgrounds. Instead those loans should be interest free for those students who go into the teaching or medical field and with that should be the provizo they would be interest free if they worked maybe 3 or 4 years after graduation in teaching or nursing or doing other medical work in their own home town village. That's how we do it here and it works well because they will want to study and finish up so that they can help their own people.
