Centre Considering Income-Contingent Loan Scheme For Higher Studies
New Delhi: The Centre is actively considering a proposal to introduce ‘income-contingent’ loan scheme to ensure that no student is deprived of higher education due to want of funds.
The scheme basically facilities a student to repay the loan only after he/she has secured employment. Unlike the standard education loans which pose a burden on students because of high-interest rates, the former is structured in a way where the repayment is linked to the level of monthly income. This gives enough breathing space to a student who has landed with a new job and is eager to fulfil his aspirations without having to actually bother about the repayment aspect.
News agency ANI quoted HRD Secretary R Subramaniam as saying that the Ministry is examining the matter.
Proposal Mooted By IIT Delhi:
The proposal was forwarded to the Ministry by IIT Delhi with a request to examine the HELP programme of the Australian government. The Higher Education Loan Programme (HELP) is income-contingent based and the model has drawn admiration from several countries.
IIT Delhi felt that such type of a resource-support initiative will help students realise their dreams by selecting the subject and the jobs of their choice rather than running about high-paying jobs to repay the expensive loans.
IIT Delhi is learnt to have suggested the Ministry set up a government agency to fund the higher education expenses of the needy students. The agency, it said, could be modelled after the Higher Education Finance Agency which supports infrastructure development of the institutes.
The agency would be responsible for fully or partially funding the higher education of the students through the income-contingent students’ loan.
As per a study, over 25-30 per cent of the meritorious students in the country give up higher studies because of the financial condition of the families.