Last day in the budget session of 2014-15 in Lok Sabha, good news came up for the education loan takers. While announcing the interim budget finance minister Mr. Chidambaram declared a moratorium period for all education loans taken up to March 31, 2009, and outstandings as of March 31, 2013. Since the general elections are approaching finance minister is trying to engage himself more with the families applied for education loan.
Further he announced that government is trying to aid nearly 900,000 students. The government will take over the liability for outstanding interest as dec 31, 2013, but for the period after April, 2014 the borrowers need to pay the interest.
To help out the student borrowers government initiated the subsidy scheme in April 2009-10 for education loan disbursed after 2009. It has been reported that bank as per the IBA rules, the loan repayment period is for about 10-15 years but bank officials did not maintain the schemes properly and rather force the students to repay the loan with 3-5 years. Education loan portfolio is increasing in banks, in order to lure 25 lakh borrowers the DMK demanded writing off of education loans.