Date:25/11/2008 URL: http://www.thehindu.com/2008/11/25/stories/2008112561210400.htm

Karnataka - Bangalore

Norms for education loans at 6 per cent interest announced

Staff Reporter

Loan amount not to exceed that specified by the principals
If a student does not clear all subjects in a semester, he/she will not be eligible for scheme

Bangalore: The Government has announced the guidelines for sanctioning of education loans at 6 per cent interest rate for poor and meritorious students pursing professional education.

According to a communiqué on Monday, the guidelines have been framed following the Budget announcement made by Chief Minister B.S. Yeddyurappa.

Poor and meritorious students find it difficult to get education loans and pay high interest, sometimes as high as 12 per cent. In the interest of poor students, the Government decided to decrease the burden on them by issuing loans at 6 per cent interest.

The communiqué said that banks, including State Bank of India, State Bank of Mysore and Canara Bank, have been directed to identify one branch in Bangalore.

The applications received by all other branches in the State should be forwarded to this designated branch for scrutiny and approval. Eligible candidates, who have appeared for the Common Entrance Test (CET) conducted by the Karnataka Examinations Authority (KEA), may apply for the loans using the prescribed application forms of any nationalised bank.

The communiqué also said that the loan amount should not exceed that specified by the principals of the respective colleges. The loan amount should also not exceed Rs. 5 lakh and must include tuition fees. While the students have to pay only 6 per cent interest, the Government would bear the remaining interest amount, it is said. If a student does not clear all subjects in the semester, he/she will not be eligible for the scheme until completion of the semester. The scheme will be eligible only till the duration of the course.

The banks have been directed to consider the candidates’ previous academic record/ performance, while verifying their eligibility under the scheme. All the applications received should be sent to the nodal agency (KEA) through the identified branches in the city. It is said that the applications, in duplicate, should be segregated according to the courses and must include the college details.

The communiqué also said that the Director of Technical Education will release the amount required to the nodal agency, which will in turn send it to the respective banks through a one-time cheque payment.