TN targets Rs 2,500-cr edu loans to 1L students

CHENNAI: The Tamil Nadu government has decided to take measures to ensure that education loans to the tune of Rs 2,500 crore will be sanctioned and disbursed by various banks to one lakh college students in the coming academic year.

The move comes against the backdrop of mounting complaints about banks denying educational loan applications without any valid reason. According to sources, defaults on education loans have crossed 8 per cent, forcing banks to go slow on such loans.

A senior official from the Higher Education Department, seeking anonymity, told DT Next that the recent State Budget has come out with educational loan provisions to fulfil the educational aspirations of students and reduce the financial burden on parents. Based on these provisions, it has been decided to facilitate hassle-free loans through banks without complicated procedures. Explaining the initiatives planned on this front, he said there would be a common platform connecting parents, the government and banks to process loan applications. “It was also decided to tie up with all nationalised banks and the financial institutions recognised by the Reserve Bank of India (RBI) in the State,” he said adding: “The government authorities will speak to the higher bank officials on the issues involved in sanctioning education loans, going by the past experience”.

After getting reports from the banks concerning the recovery of education loans, the official said a detailed road map and guidelines are being prepared on the way forward.

Stating that the district authorities along with the banks have already commenced special educational loan camps in Chennai, he said similar camps would be conducted in other districts as well and priority would be given to students from rural areas.