The finance ministry has cleared its stand on education loans to 'management quota' students. According to the ministry, students enrolled under the management quota will not be eligible for education loans.
This comes after Indian Banks' Association (IBA) had last year decided to exclude management quota student from purview of education loans. Minister of State for Finance, Mr. Namo Narain Meena supported the IBA's stand and stated that "Model Education Loan Scheme" is only for meritorious students.
This had created some controversy and Mr. Pranab Mukherjee, the then Finance Minister was received a letter from some MPs to rethink over the decision, claiming it to be unfair.
Mr. Meena in reply to one such letter from Rajya Sabha MP Mr. KN Balagopal stated that the model education loan scheme is to provide financing to students who have taken admissions into eligible courses based on their merit.
"As per the scheme, the assessment of the educational loan is based on the employability and earning potential of the student upon completion of the course," added Mr. Meena
Mr. Balagopal however differed and believes that this is injustice and unfair to the students. This would effect the 15% of students who take admissions under the management quota of educational institutions. Also students who take admissions in minority run institutes would be deprived of loans under this scheme.