NEFC to provide student loans at low interest

The Ministry of Human Resources and Development has written to the heads of the scheduled commercial banks to implement interest subsidy scheme on education loans for poor students pursuing higher studies. Now Kapil Sibal is planning to ask state governments to share with the Centre financial burden of starting a new agency that will offer soft loans to newly upcoming education institutions and students.

But the states are already complaining about the inadequate funds to implement the historic right to education law and have been demanding for additional funds from the Centre therefore this move of human resource development minister can increase their cries of distress.

On the other hand such helplessness will only help the minister in projecting the Centre as the lone fighter for education reforms in the country, a role that forms the part of several Sibal policies.

According to top government sources Sibal will be asking state education ministers to give financial support to the proposed National Education Finance Corporation (NEFC) in a meeting to be held on June 18.

A source said, “It is a win-win situation for the Centre. If states help in funding the NEFC, it reduces our financial bill. If not, it strengthens our position at a time when we face opposition from them on other education reforms.”

However several state governments, including Bengal and Tamil Nadu, have raised apprehension over the powers of the proposed NEFC. Thus, their apprehensions will be discussed by the Central Advisory Board on Education (CABE) — which includes all state education secretaries and the HRD ministry. The meeting will be held on June 19, a day after the NEFC is discussed.

The CABW will also take up discussion on fund-sharing arrangement between the Center and states for the right to education law, the other area of contention.

Earlier, in the Eleventh Five-Year Plan (2007-12) the promised NEFC is seeing along the lines of the National Bank for Agriculture and Rural Development (Nabard), which is providing assistance to self-help groups by offering small loans.

As per the HRD ministry’s draft, the funds to NEFC will be provided through three sources - budgeted funds, a higher education cess already in place but unused, and bonds gift-wrapped in tax concessions. In case states agree to give financial support, the Centre might reduce its budgetary allocation for the NEFC.

The proposed lending agency will be providing student loans at low interest. The arrangement will be implemented parallel to an existing scheme that subsidizes education loans.

The NEFC will also give financial support to the new upcoming government and private higher educational institutions.

According to sources Sibal will put forward his argument that as state government –run institutions will also get benefit from NEFC loans, therefore they should try and give financial support to the proposed agency.

Central Bank of India to provide educational loan to LPU students

The Central Bank of India and Lovely Professional University have signed an MOU under which educational loans will be provided to the aspiring, deserving and brilliant students who cannot afford to pursue higher studies due to financial limitation.

The loan will be disbursed through a single-window clearance facility at nominal and lowest possible interest rates. The girl-students will be provided loan at lower rate of interest in comparison to others. Bank will open a counter in the campus so that students can avail loan easily and for speedy disbursal of loan.

The General Manager of the Central Bank of India, R. Mishra & AGM SC Bhayana was present to sign this MOU. After signing MoU Mishra said, “Education is a fundamental right of each and every denizen of India. However, many of the good students remain devoid of higher studies due to their economic conditions or other types of imposed upon financial constraints. Our bank has taken a great step in this regard by trying to make the loan-procedure very easy. A student will be able to get loan from any of the 3400 branches of our bank through out India.”

On this occasion, the Chancellor of the University Ashok Mittal said: “Such collaboration would result in supporting brilliant students, lacking financial support and opportunity, to complete their studies. It is often seen that in-spite of students’ strong willingness their parents could not let them join the desired program of study due to want of money. This MOU is certainly going to prove as a great boon to all such parents and students as procedure in acquisition of the normal loan to continue a programme have been made very easy. Also, CBoI will open a counter in the campus to facilitate the students in the campus itself for speedy disbursal of education loan. ”