Saturday, March 6, 2010

Educational Loans Facility

The GOI announcement to set up a National Education Finance Corporation (NEFC) to finance entities interested in setting up educational institutions on easier terms and conditions is yet another welcome move towards reforms in higher education. About a decade ago, it was very difficult for even meritorious students to pursue higher studies in professional colleges in India in institutions of their choice for want of educational loans. GOI, RBI, IBA and other nationalised banks have made this simpler by offering loans at concessional rates of interest even for higher education abroad. The present decision to set up a separate corporation for funding promoters to start educational institutions is laudable. Kapil Sibal and his team deserve compliments to reform and bring in radical changes in the education which is more an investment for future.


Anirban Dutta said...

This was much coveted which is going to materialize now. To me it appeared that giving educational loans was a kind of CSR for the PSU banks and not exactly a much sought after source of revenue. The private banks in this regard are also not that friendly, as they are with personal loans or home loans.

Prof Chowdari Prasad said...

Exactly two months back, I wrote this item in my blog. The Hindu of Monday the May 10 (page 11) carries a news item with a caption "Set up Loan Guarantee Authority for Education Loans" as suggested by Dr Montek Singh Ahluwalia of Planning Commission to the Ministry of HRD, GOI in connection with setting up of NEFC. There would be a 'fast track' approach and two divisions - one for dealing with infrastructure loans and the other for loan guarantees. This is yet another progressive steps in reforming the higher education domain in India.

NEFC would refinance the institutional loans available to colleges for capacity expansion and new investments etc., at PLR of banks. The repayment would be 15-20 years with a five year moratorium on principal repayment. Our Planners and Policy Makers seem to be thinking and working on right lines in recent times towards Higher Education issues instead of suspecting, punishing and corrupt ways hither to. All Educationists and Institutions should welcome such steps.