THIRUVANANTHAPURAM: The state government has issued guidelines for its education loan repayment support scheme. The scheme which found place in the two budgets of the LDF Government is intended to help students hailing from low to middle income groups struggling for repayment. Under the scheme, loans are classified into two categories; education loan non-NPA/standard account and education loan turned to NPA account on or before March 31, 2016.
The scheme will be applicable to recognised technical or professional courses in India.
It will not be applicable to students admitted in management or NRI quota except nursing students who secured admission under management quota.The scheme is available to those who started repayment before April 1, 2016. The government has asked all banks to allow students to avail of the scheme before initiating revenue recovery procedures using government machinery.
This includes loans with a sanctioned amount up to Rs 9 lakh. The annual repayment amount (principal plus interest) will be shared between the government and the borrower in a prescribed ratio during the four-year relief period (after repayment holiday) w.e.f. April 1, 2016. If repayment was already made by the borrower during the first year (from 1 April 2016 to 31 March 2017), 90 pc government share of repayment amount will be adjusted against their loan outstanding and will not be reimbursed to the borrower in case there is no amount outstanding to be adjusted in future.
Financial assistance will be provided by the government only after receiving assurance from the corresponding bank that the beneficiary has remitted his share for the respective period.
The government will assist the borrower to settle and close the loan by paying 60 pc of the base amount provided the borrower pays balance 40 pc of the base amount in advance. The bank should agree to waive the entire interest and settle the account on receipt of the base amount in full.