Now get an interest free loan to study at IIT

The Minister of State for Human Resource Development, Dr. Mahendra Nath Pandey announced on Thursday that IIT students will now receive interest free loans.

This motion was first proposed by the government under the 'Vidyalakshmi' scheme which was approved by the Prime Minister in the start of FY16.

“It has been decided to provide interest subvention on the education loans, for all students admitted for undergraduate and the 5-year integrated degree programmes in IITs, covering the period of the study plus one year of moratorium under the Vidyalaxmi Scheme,” the Ministry said in a statement.

The decision comes after the HRD’s former announcement of hiking the fees of IIT undergraduate students from Rs 90,000 to Rs 2 lakh per annum.

The following guidelines are set by the Ministry under the scheme: 

(i) The facility shall be made available to all the students whose household income does not exceed Rs 9 lakh per annum. 

(ii)The education loan, for this purpose, shall cover only the tuition fee payable by the student as per his eligibility. The portion of the tuition fee paid by the student from his own sources at the time of securing admission could be reimbursed from the overall loan. 

(iii)The terms of the loan shall be in accordance with the broad contours of the Educational loan Scheme of the Indian Banks’ Association (IBA) for pursuing Technical/Professional Education studies in India. 

(iv)The term of the loans sanctioned under this dispensation shall be 10 years. 

(v)There shall be no collateral for sanction of the loan except the personal guarantee of the student (applicant) and the parent/guardian (co-applicant). 

(vi)The subvention of interest (on equated basis) shall be applicable for a maximum period of 5 years (which may include a one year moratorium). 

(vii)After the expiry of the above period, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing educational loan scheme of the Banks and as may be amended from time to time. 

(viii)This facility is applicable only to the loans taken by the students who secured admission into the undergraduate courses of IITs (including the integrated courses) starting from the academic year 2016-17. 

(ix)The interest subvention is subject to the satisfactory performance of the student in the institution. 

(x)Payment of the interest subvention shall be from the internal accruals of the IIT. 

“However a Central Sector Scheme to provide interest subsidy on educational loan (CSSIS) is presently operational which provides full interest subsidy during the period of moratorium (course period + one year) on loans taken by students belonging to EWS from Scheduled banks under the Model Educational loan Scheme of the IBA for pursuing any of the approved courses of studies in technical & professional streams, from recognized institutes in India,” the Ministry said in a statement. 

Along with doubling the fee for IIT students the Ministry had also decided to do away with the 40% weightage to Class XII marks in calculating the rank in Joint Entrance Examination (JEE).Candidates, however, must score at least 75% marks in the board exam.

This is supposed to be implemented from academic year 2017.