Now, PAN card mandatory for obtaining Education loan

Chennai: Now, parents also need to submit their PAN to obtain education loans for their children.

Over past years, higher education for rural people was a distant dream. Students were not able to pursue higher education, as lot of money had to be shelled out.

Few years back this situation changed with banks providing loan for higher education. As a result, students from economically weaker section also came forward to study with interest.

Students need to submit PAN cards to obtain education loans from banks. Some, change houses after obtaining the loan. To avoid such problems, now banks insist on PAN card of the parents too.

HC sets aside Bank's order rejecting education loan plea

Chennai: The Madras High Court has held that a nationalised bank cannot deny a student-applicant an educational loan solely on the ground that admission was secured under the management quota.

Justice M Jaichandren set aside an order of a nationalised bank rejecting an engineering student J Pandiyarajan's's educational loan application, as he had been admitted under the management quota.
   
The judge applied the principles laid down in an earlier judgement and said the bank was not justified in rejecting the student's education loan request.
   
"There is no prohibition to sanction education loan to students admitted in the management quota," the Judge said and added that if the banks stand was accepted, no student admitted under the management quota, in any private self-financing college, would  be in a position to secure an education loan.
   
This would defeat the purpose for which the Union Government and RBI had introduced the scheme.
   
Directing the student to resubmit an application to the bank for a loan, the judge said the bank should pass appropriate orders as per the regulations and guidelines laid down for granting educational loans.
   
The petitioner, studying B.E (Mechanical) course in a private institution, here, had challenged a February 13 last order of the Indian Overseas Bank's branch in Salem district, rejecting his request for educational loan.     

He had sought a consequent direction to the bank to provide him the financial assistance. 

Sibal attacks plan panel for rejecting proposal on edu loans

New Delhi: HRD Minister Kapil Sibal hit out at the Planning Commission for rejecting a proposal to set up an education finance corporation to refinance student education loans, saying the move was against the interest of the students.

"The HRD Ministry has been knocking at the doors of Planning Commission saying please set up the corporation... and my friend Montek has been little more conservative than me on these issues. I have to say this because they rejected idea of the corporation," the Minister said.

"Unless the loans are guaranteed by government, no financial institution is going to give loans," he said at a function here with Planning Commission deputy chairman Montek Singh Ahluwalia in attendance.

Sibal said the present loan structure of the government was not conducive for either students taking loan or bank offering loans. "We need to actually liberalise the whole structure".

In this context, he suggested that financial institutes should have a flexible lending policy when extending loans for setting up educational institutes.  

"I believe the banks must be asked to give long term loan to educational institution paid over period of 20 to 25 years. To set-up an education institution nobody is going to borrow at 12 per cent or 16 per cent and set-up up institution where you have to return the loan over period of 7 years," he said.

Member Planning Commission Narendra Jadav, on the occasion, said a working group on education has recommended allocation of Rs 4,13,000 crore for the 12th plan Period, the allocation of which will be finalised next week.  

Favouring policies like free land for setting up educational institutes and health care facilities, Sibal said no private sector would invest unless "you give them appropriate environment".

In this regard, he said the government has to clearly spell out the stand on issues which are hindering reforms initiatives.

He touched upon the issue of litigation involving land and confided that when he suggested free land for educational institutes and health facilities being in an empowered GoM looking into natural assets, "there was enormous opposition to this even in government".

"Every time you want to do something like this, the court thinks we are giving freebies to private sector. Unless these issues are clarified, we wont be able to move forward. Government has to strongly state that these are the fundamentals without which no reform process can take place," he said.

N R Narayana Murthy, who heads a committee on corporate sector participation in higher education, said India does not have adequate number of educational institutions to take care of eligible students.

He said about 26 million seats need to be provided over the next decade.

"The existing higher education system in India lags in comparison to global standards and is inadequate to meet the demand. No Indian college or university features in top 300 list of Times higher education supplement," he said. 

SBI to slash interest rates on education loan by up to 1 pc

Mumbai: The country's largest lender SBI is likely to cut interest rates on education loans by up to 100 basis points (1 per cent), effective Monday.

According to sources in the know of the development, the State Bank of India has decided to reduce interest rates on education loans by 25-100 bps across various maturities, after its Alco (asset, liability committee) met over the weekend.

Accordingly, for a loan of Rs 4 lakh, interest rate will be down by 25 bps to 11.75 per cent; for loans in the Rs 4-7.5 lakh range, the rate is down 100 bps to 12.50 per cent, while for loans above Rs 7.5 lakh, the rate is lower by 25 bps to 12.25 per cent.

SBI is also offering a concession of 50 bps on interest rates for loans given to female students.