Outlook Money
The Indian government is set to launch a model scheme that is aimed at providing education loans to all eligible students, ensuring access to higher education for a broader demographic.
The scheme will cover various educational expenses, including tuition fees, accommodation, and other related costs, making it easier for students to pursue their academic goals without financial constraints.
The initiative aims to streamline the loan application process, making it more accessible and user-friendly for students and their families. However, there is a set of guidelines by the government to fill in the application, failing which applications can be rejected as well.
The plan offers loans up to Rs 7.5 lakhs without the need for collateral or a third-party guarantee, as long as the loan qualifies under the Credit Guarantee Fund Scheme for Education Loans (CGFSEL) or the Central Sector Interest Subsidy (CSIS) scheme. Additionally, no margin money is needed for loans up to Rs 4 lakhs.
MELS provides a moratorium period to facilitate the repayment process, which matches the duration of the study program plus an extra year. Following this period, students have the option to repay their loans over a maximum span of 15 years, offering considerable flexibility in financial management post-graduation.
The government focuses on inclusive education funding, aiming to support students from economically disadvantaged and underprivileged backgrounds so that financial obstacles do not impede their educational goals.