Education has become a costly affair in the present time. The need for making education affordable for all is increasingly gaining priority in the Government's checklist of prime concerns. In this context, the Indian Government came up with many proposals for modifications in the existing education loan system.
While one scheme focused on granting education loans at rates as low as 4% another came up with slashing interest payment during moratorium period and still another focused on offering tax concession on education loans for all streams of study including vocational courses.
New features added to education loans
Rate of interest: The HRD ministry had proposed a while back that the rate of interest charged to different borrowers would depend on the income level of their parents. Compare current Education Loans here.
The interest rate was chalked out in a way that students whose parents have an annual income of less than Rs. 4.5 lakhs would be granted loans at a rate lower than that charged to those whose parents' income is more than the 4.5 lakh threshold but the loan amount sought is less than Rs. 12 lakhs.
Loans amounting to more than Rs. 12 lakh would be charged a higher level of interest than the rest.