Students, parents welcome new scheme announced in budget

In the Union budget of 2009 FM Pranab Mukherjee has announced a new scheme called ‘Interest Subsidy on Education Loans' which has brought smile on the faces of students who are seeking educational loans. Under this scheme there will be no interest on loan for higher studies.

In this scheme the entire interest amount on the loan taken by the student will be financed by the ministry of human resource development (HRD). Earlier till the students had not completed their studies bank they were not required paying interest on the loan taken from banks.

The scheme will be applicable for students who will take loans from public sector banks for pursuing professional and vocational courses. But, there is confusion whether the scheme will be applicable to all private recognized finance institutions.

However the scheme has been welcomed by students and parents' as they believe this will help in boosting education among the needy students. Bhupendra Shekhawat, spokesperson, Rajasthan University, and a father of 15-year-old daughter said, "This would encourage parents to send their kids for higher studies".

The finance minister has also announced full interest subvention in the loan amount to the students who take admission in institutions approved by banks. According to experts this provision has its limitation, as the premier institutions like IIMs and IITs have been approved by the private sector banks due to their high repayment ability.

According to Industry experts from this scheme thousands of students across the country, will get benefited, especially the poor. According to academicians, this scheme has been launched at the right time as the admission for new session is going on and the premier institutions have raised fees for professional courses.

Kamala Poddar, director, Kamla Poddar Institutes pointed out, "It is a welcome news for the students aspiring to pursue higher studies in professional courses. It would also improve the quality of education being given in professional and vocational institutes."