Students entering the job markets at this time of slowdown must be worried about their salaries that might not be sufficient to serve their education loan EMIs.
But now these students may relax as the banks have come out with a lifeline of restructuring the loan amount on case by case basis. Any student who has been hit by the slowdown and finding it hard to repay their loans will be supported by the banks in the form of reschedule loans.
The industry leader, SBI has about 24% share in the education loans. "After all, we don't want a student to sell his father's house because he cannot pay back an education loan," said a spokesperson from SBI.
"Repayment starts one year after the course gets over or six months after the student gets a job, whichever is earlier. But if a student faces a financial problem and finds it difficult to repay the loan on time, we will obviously not put further stress on him," added the spokesperson.
General Manager for Bank of Maharashtra's Mumbai circle, Vikas Chhapekar said, "In case a student is unable to repay an education loan, we will definitely help him out, and either extend the date from which the student must start repaying the loan or increase the duration for over which the loan has to be repaid."
Bank of Baroda will also make sure that students do not suffer amid the slowdown. "My heart goes out to students at a time like this. If approached by a student who cannot repay his loan, we will, after clearance from the top, help reschedule," said A K Agarwal, a senior manager at Bank of Baroda.
A student who graduated from IIM-Bangalore this year, Sidharth Gupta said: "This is obviously re-assuring. Banks already have a rather relaxed system of repaying an education loan. But for those who do not want to take on the burden of repaying their loans right away and feel they will be in a better position to do so next year, it helps to know that banks may re-negotiate the terms of the loan."
Meanwhile as banks have become lenient in extending the education loans but at the same time they are strictly following to the guidelines issued by the Centre. "We are aggressively sanctioning more number of education loans," said G Ramanathan, Deputy General Manager of Syndicate Bank.