The government has announced a support scheme to help students from financially backward families repay education loans.
Chief Minister Pinarayi Vijayan told the Assembly here on Thursday that the scheme would provide relief to debt-ridden families who had availed themselves of education loans. Addressing a special session of the House to mark the 60th anniversary of the first legislative Assembly, he said the scheme was designed to help families facing revenue recovery after finding themselves unable to repay the loan. “It is not a debt relief programme, but to support the repayment of education loan during the four years after the repayment holiday.”
The scheme would have retrospective effect from April 1, 2016 and would be applicable to loans up to ₹9,00,000. The government would share 90% of the repayment liability in the first year, 75% in the second year, 50% in the third year and 25% in the fourth year.
For bad loans up to ₹4,00,000 availed before April 1, 2016, the government would foot 60% of the repayment liability if the bank waived the interest. For loans between ₹4,00,000 and ₹9,00,000, the government would provide 50% of the principal amount up to a maximum of ₹24,000 on a special package for closure of the loan.
Mr. Vijayan said the government would bear the repayment liability in the case of the student’s demise or handicap due to an accident, provided the bank was ready to waive the interest.
The scheme would cost the government ₹900 crore, according to an estimate prepared by the State Level Bankers Committee, he said.