Today there is a significient announcement related to the education loans by the government.

Financially poor students can take the education loans without paying the interest till moratorium period. Here moratorium period is 6 months after completing the course or when the student get the job, Which ever is happening first will be trigger the loan repayment process. The existing system allows students to pay only the interest till the repayment of loan starts.

Update: This scheme is become operational. And it is effective from 2009-10.

The new announcement by center says Students from families with earning less than Rs 4.5 lakh per annum will be eligible for this scheme. Only those enrolled in recognized professional courses can avail of this scheme. This would include education institutes established by Act of Parliament, institutes recognized by relevant statutory bodies, IIMs and other institutions set up by the central government. The actual interest will be paid by the government to the bankers. It is really good initiative by the govt. to help the poor students.

The scheme will be applicable from the academic year 2009-2010. The implementation and monitoring of the scheme will be finalized in consultation with Canara Bank. The prime minister had announced the scheme in his Independence Day address.

Top 5 Points to consider for Interest Free Education Loans

1. 2. 3. 4. This subsidy loans will be available for all the technical and professional courses in India. If you are doing any courses outside Indian, this scheme will not be applicable. Courses done after class XII in institutions established by Acts of Parliament, recognized by statutory bodies, IIMs and other central government institutions. The existing education loans will be linked to this scheme. This scheme will be available only once for a student. For example if you have used this scheme for under graduate studies, then you cannot apply again for the post graduate. But, it is applicable if you are doing the combined UG and PG courses. 5. This scheme wont be available if you discontinue your course in the middle except if there is any medical problems.

Update: This scheme is become operational. And it is effective from 2009-10.