With the growing need for promoting quality education amongst all sectors of society, it gets hard for most of us to fund our education. The renowned institutes charge a fortune, hence making it hard to pay the fee.
Public sector banks like Punjab National Bank has been judiciously following the policies modified by the government facilitating the people throughout the country. PNB Education Loan extends various loan schemes like PNB Saraswati, PNB Pratibha, PNB Kaushal, etc. It usually charges an interest rate between 8.95% to 10.50%.
Our government has always been upfront in promoting the idea of education by launching various schemes and taking up initiatives. Apart from Interest Subsidies schemes to relax the interest rates charged by banks, the Government ensures to be active in making education loan schemes student-friendly.
While Education has always been one major criterion for political parties to gain votes, the manifestoes during elections do bring some happy news for students. Major Political Parties stepped up in the Lok Sabha Elections 2019, by emphasizing on imparting Quality Education to the students by easing out the policies of Education Loan Structure.
Here’s how the manifestos of different parties portrayed like:-
1. Aam Aadmi Party
In 2015, Education Minister Manish Sisodia came forward and said that the Delhi Government will act as guarantor to banks for providing education loan to people who were unable to get the loans due to lack of available collateral property. The interest rate fixed by the government was base rate +2 percent for any loan to INR 10 lakhs.
In the manifesto given out by the party in 2019, they assured people to make this a mass act and enable people to be a part of a top-notch institution through easing out other policies too in the line of Education Loan System. The party even assured further by hinting to writing off loans for the people pertaining to the EWS category.
2. Bharatiya Janata Party
BJP hinted on increasing on the allocation of funds in the segment which provides interest-free education loan from INR 800 crores to INR 2,200 crores by the end of their second reign in India.
Every opposition party acclaimed this statement to be a false promise made by the BJP invoking people to cast their votes in their favor.
Currently, BJP is serving more than 4 lakh students under this scheme who are unable to pay off their loans by their own available funds.
3. Indian National Congress
Rahul Gandhi (Chief of Congress) stated that, if his party comes into power in the year 2019 then all the interest charged on the student's loan will be waived off. He also added that interest charged on loan has always been the sole matter of concern for the students and waiving off that interest will act as a huge relief to people.
They also promised to introduce a single window system for the repayment of loans allowing the people top to repay it only at the time when they are able to secure a permanent job.
To know what various banks offer via their Education Loan Schemes, click here.
How These Policies will prove beneficial to the students In Availing Education Loan?
1. If the Government ease out the interest rates involved in providing Education Loan to the students then the amount of burden imposed on the people will decrease leading to the proper allocation of funds in savings.
2. If a Single Window Education System is implemented then the students will be able to support their parents in repayment of the loan.
3. Students will be able to pursue their studies even in Abroad facilitating them with an added skill and exposure.
4. Students will be facilitated with the right to modify the structure of loan repayment according to their convenience.
How Banks will be affected due to change in Education Loan System?
1. Public Sector Banks are run by the government which is the reason why they can be easily regulated according to their needs but private sector banks primary source of income is the interest charge on Loan. If the interest is waived off private banks will not be able to provide loans.
2. If the interest charged on the Education Loans are varied then there will be no injection of money in the economy of the country.
3. People will apply for additional redundant loans which will have an adverse effect on the cash inflows of the banking sector.
Presently, the interest rate charged by the public and the private banks on providing education loan to people ranges between 8.50% to 10.50%. It usually differs according to the time duration and the amount acquired by the people.