The Delhi government recently launched the Higher Education and Skill Development Guarantee Scheme as part of its 70 Action Points framework. This scheme’s objective is to provide financial support to meritorious students through the banking system. As part of the scheme, students will not have to pledge any collateral or provide margin money, unlike one has to in the case of traditional education loans.
Under the scheme, the government will essentially act as guarantor and will furnish the loan amount in case the applicant defaults. A corpus of RS 30 crores known as Higher Education and Skill Development Credit Guarantee Fund would be used to provide appropriate guarantee.
The following are the features specific to the Delhi government’s Higher Education and Skill Development Guarantee Scheme
- Once the degree is complete, the borrower will get a 1-year moratorium period
- The loan can be repaid over a period of 15 years, or 180 EMIs
- Government’s guarantee will be available for loans taken for studying in both government and private institutions
- In the case of skill development courses, institutions should have SFRC/NAAC/NBA grading
- If the student starts paying the interest amount during the study and moratorium period, the bank might offer 1% concession in interest.
- Banks regularly conduct follow-ups to monitor the progress report of the student by contacting authorities of college or university.
- Students need to provide the banks with authenticated copies of documents furnishing details of their academic performance.
Courses Eligible under the Scheme
- Graduate/Post Graduate degree courses or PG diplomas offered by recognized colleges /universities having UGC/AICTE/AIBMS/ ICMR accreditation.
- Courses like CFA, CA, ICWA
- IIT, NIFT, NLU and IIFT courses
- Regular Degree/Diploma courses approved by Director General of Shipping/Civil
- Aviation/ Indian Nursing Council if the course is pursued in Delhi.
- Skill Development Courses according to the specifications of Govt. of Delhi.
Expenses that can be covered under Scheme
- College, school or Hostel Fees
- Library/Examination/ Laboratory Fee
- For purchase of books, uniforms, equipment/instruments
- Refundable/caution deposits supported by institution fees.
- Insurance premium for student borrower
- Purchase of computer at reasonable rates, if required necessarily for the completion of courses.
- Other expenses like study tours, project work, thesis etc.
Other important Terms and Conditions
1. Minimum Age
Since, there is no minimum age bar; a letter of ratification has to be submitted to the bank upon attaining majority, if the student was a minor when the documents for the loan were executed.
2. Joint Borrower
Primarily the joint borrower for education loan has to be a parent, however for married applicants it may also be their spouse or parents-in-law.
3. Loan for more than one child
According to this scheme, existence of another education loan in the name of brother/sister shall not cause hindrance for a meritorious student from the same family to obtain an education loan.
4. Top up Loan
Under this scheme, top-up loans may also be offered to students pursuing higher studies under the eligibility criteria, if it is commenced during the moratorium period of the first loan.
Scheme’s Loan Amount and Eligibility Criterion
Applicants are eligible for a maximum loan amount of Rs 10 lakhs.
Students who meet the following criterion are eligible to apply:
1. Who are about to pursue diploma /degree /vocational courses from constituent colleges of University of Delhi, government institutions/universities, private universities or self financed institutions of Delhi having NAAC/ NBA accreditation.
2. Who have completed their Class 10th and/or Class 12th studies from Delhi, depending on the qualifying examination requirement of the prospective course *A minimum of A or B grade is required for private institutions having NAAC/NBA accreditation
The following documents are required at the time of loan application:
Identity & Address Proof
Passport or Voter’s ID Card or Driving License or Job Card issued by NREGA or Aadhar Card or PAN Card or any other document as acceptable to the bank
Latest 3 months’ salary slip showing all deductions and Form 16
Last 2 years’ IT returns and computation of income for the last 2 years certified by a CA
Bank statement or Passbook where salary or income is credited
Last 6 months’
Last 6 months’
List of approved banks for Loan Guarantee Scheme
- Allahabad Bank
- Andhra Bank
- Bank Of Baroda
- Canara Bank
- Corporation Bank
- IDBI Bank
- Indian Bank
- Vijaya Bank
- United Bank Of India
- State Bank Of India
- Syndicate Bank
- Union Bank Of India
- Punjab National Bank
- Oriental Bank Of Commerce