All students of the elite Indian Institutes of Technology (IITs) whose annual family income is less than Rs.9 lakh will be eligible for interest-free education loans for a period of five years, the human resource development ministry. Earlier, the interest subvention scheme was for students whose annual family income was Rs.4.5 lakh.
The decision, the first taken by the new human resource development minister Prakash Javadekar, is to offset a tuition fee hike in April this year for undergraduate IIT students. The annual tuition fee for undergraduate students was increased from Rs.90, 000 per year earlier to Rs.200,000 per year effective from the 2016-17 academic year. “It has been decided to offer interest subvention on the education loans of all students admitted for undergraduate and 5-year integrated program covering the period of the study plus one year of moratorium (not exceeding five years in total)…,” the HRD directive to IITs said.
This will be applicable to all students whose family income is not more than Rs.9 lakh and the facility will be applicable only for loans taken to pay tuition fees. Loan taken for hostel accommodation and food will not be covered.
Students who pay a certain amount for admission will get reimbursed from the loan account. The interest on the loans will be paid by IITs from their internal accruals. Banks will have to issue an education loan for tenure of 10 years and without any collateral except the individual guarantee of a student and his or her parents, the HRD ministry directive said.
The order, issued by additional secretary in the HRD ministry R. Subramanyam, asks all IIT directors to implement the direction immediately after negotiating the interest rate with banks.“A decision has been taken on interest subvention for IIT students and this is going to benefit a large segment of the student mass,” Javadekar said, adding the underprivileged students from scheduled caste, scheduled tribe and physically handicapped category (a total of 25% of the student mass) will enjoy a full fee waiver as decided earlier in April.