Accessible for Borrower and Safer for Lender
There have been a slew of directions/guidelines in the matter of enabling students to get education loans faster as well as banks feeling safe in extending such loans to students (in spite of their status as nonearning individuals). These directions/guidelines are summarised below:
Model IBA education loan scheme for pursuing higher education in India and abroad
Banks are now expected to expedite education loan sanction without delay. The IBA scheme provides for finance as under: Studies in India up to Rs 10 lakhs Studies abroad up to Rs 20 lakhs There are moves to increase the quantum of finance, from the current Rs 4 lakhs to Rs 7.50 lakhs, without the requirement of providing security or third-party surety. A Credit Guarantee Fund Scheme for Education Loans (CGFSEL) has been established to guarantee education loans sanctioned by member
In order to bring in simplified norms of lending coupled with stricter monitoring of uncertified educational institutes, the government of India has brought out a notification (dated 16.09.2015) to establish Credit Guarantee Fund Scheme for Education Loans (CGFSEL). Banks are expected to increase their loan volume and numbers in extending education loans to needy students for pursuing further studies in India and abroad.