The state government of Karnataka has declared a 6%loan subsidy for students of professional colleges and has issued certain guidelines to the nodal agency of education and director of technical education regarding the issue.
Students can avail loans from any nationalized bank provided he is admitted to any professional course through the Common Entrance Test (CET) conducted by Karnataka Examination Authority (KEA). Banks can sanction a education loan to any student who has cleared CET and can identify one particular branch for the repayment of the loan amount. However banks which receive such applications from the students should send forward the applications with proper recommendations.
The loan amount that will be sanctioned by banks will depend upon the entire fees for the course that should be stated in a certificate given by respective college principals. The maximum amount that can be availed by a student is Rs 5 lakh including the tuition fee. The students have to pay a maximum interest rate of 6% on this loan.
The guidelines state that in proposals regarding the repayment of subsidy, banks have to assure that students have cleared the earlier semester and are eligible to continue the course. Only such proposals will be entertained for the subsidy repayment.
The banks need to compile all such proposal and send it to the nodal agency through their representative branch. Banks will get the subsidy amount for all the proposals through a single cheque. In case if a student fails to clear any semester and is not eligible to appear for the next semester, then the banks will not get subsidy for the entire course. Therefore banks need to ensure this before approving the application.
Subsidy will only be provided for the course tenure.