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Guidelines issued for education loan repayment support scheme for Kerala

Gayathri | Wednesday, May 24, 2017 5:15 PM IST

Guidelines issued for education loan repayment support scheme for Kerala

The Finance Department on Friday published the guidelines for the government’s Education Loan Repayment Scheme. The scheme is applicable to education loans not exceeding Rs 9 lakh, and to students whose family income does not exceed Rs 6 lakh per annum. 

The state government has announced guidelines for availing the benefits of education loan repaymentsupport scheme announced in the 2016-17 budget.

The scheme provides government support to those who find it extremely difficult to repay the educational loan even after the completion of their course.

The support is for repayment of loans classified into various categories such as non-Non Performing Assets(NPA)/standard account with sanctioned loan up to Rs 9 lakh, loans up to Rs 4 lakh that turned NPA on or before March 31, 2016 and NPA loans above Rs 4 lakh and up to Rs 4 lakh.

For students with non-NPA loans up to Rs 9 lakh, annual repayment amount (principal plus interest) shall be shared between the government and the borrower. The support for this would be available only to those who started their repayment before April 1, 2016 only.


The scheme is restricted to recognised technical and professional courses in India.

Management and NRI quota students and students of unrecognised educational institutions will not be eligible.  Management quota nursing students have been included in its ambit, however. 

The scheme will apply to loans whose repayment began before April 1, 2016. 

The government will bear 90 percent of the amount repayable during the first year and 75 percent in the second year. 

The government will bear 50 percent of the repayable amount in the third year and 25 percent in the fourth year. For loans up to Rs 4 lakh which were deemed non-performing assets before March 31, 2016, the government will bear 60 per cent of the principal amount. The remaining 40 per cent has to be borne by the loanee. 

For loans between Rs 4 lakh and Rs 9 lakh that have turned NPAs, the state government will shoulder 50 percent of the principal amount, subject to a maximum of Rs 2.4 lakh.

Conditions 

The scheme is applicable to education loans not exceeding Rs 9 lakh, and to students whose family income does not exceed Rs 6 lakh per annum. The income ceiling is Rs 9 lakh for differently-abled students.