Students with good grades seeking admission in recognized private colleges through management quota are now eligible to apply for education loans. This new clause has been introduced by Indian Banks' Association (IBA) in their revised model scheme on education loans.
It is reported that the increasing trend of meritorious students applying for admission in private educational institutions even after getting admission in government colleges has led IBA to take this step. This could be motivated by many reasons like not securing admission in course of choice to the preferred college being situated close to home etc.
Along with this, another new norm has been introduced, which relates to the fees being asked by institutes for various courses. From now on, for courses being offered under management quota, banks will consider the fees as permitted by State government or other such regulatory authority considering the applicant's loan repayment capacity.
Yet another new clause widens the range of courses which are eligible for availing education loans. Students desiring to do degree/diploma courses in nursing which are approved by Indian Nursing Council or other such regulatory authority, will also be eligible for granting education loans by banks.
The finance ministry has reportedly asked banks to sign a Memorandum of Understanding with educational institutes to provide advances to students. It also asked banks to provide a yearly review of asset quality of educational loans extended as part of the MoU.