The objective of an education loan is to provide the much needed financial support to deserving students for pursuing higher professional or technical education in India and abroad. The loan is provided to students who have obtained admission to career-oriented courses e.g. medicine, engineering, management etc., either at the graduate or post-graduate level. However, educational loans often end up as financial traps for graduates because of high-interest rates making timely payments difficult.
Last week Delhi government launched a dedicated online portal to provide education loan to underpreviliged students. Now in a bid to ensure that meritorious students do not stop enrolling for higher education due to lack of funds, Odisha Chief Minister Naveen Patnaik launched a new scheme, ‘Kalinga Siksha Sathi Yojana’.
Under the provisions of the scheme, the state government would provide education loan at only 1 per cent interest per annum to students undergoing higher education, including management, law, engineering, medicine and others. The state government will meet the fund requirement of about Rs 500 crore from its own resources.
“In line with the promise of providing education loan at less interest rate, the state government has decided to provide education loan at 1 per cent per annum. This will be a major help for students pursuing higher education including Management, Law, Engineering, Medicine etc,” said the Chief Minister.
Asserting that he fully understood the financial stress parents undergo in meeting the education cost of their children, Patnaik said the historic and pioneering step of the government will reduce the loan burden of lakhs and lakhs of parents.
This will also financially empower the poor students to pursue their aspiration in higher education, he added. In the budget presented in March, Odisha government allocated 12 percent funds under total budget to education.
“I dedicate the scheme to the foresight of Biju babu on his birth centenary who had instituted ‘Kalinga UNESCO’ award for the popularisation of science when he was only 35 years old,” said the Chief Minister.
Students who need up to 4 lakh loan would certainly benefit as no collateral is required but those requiring above 7.5 lakhs would need to cross the hurdle of furnishing some collateral such as property.
Also read our take on Education Loans.