The Delhi cabinet on Thursday approved the credit guarantee scheme, which will provide loans to students for higher education with government acting as guarantor.
Earlier this month, education minister Manish Sisodia held an interaction on the policy with college students.
The scheme is being introduced to help students wanting to pursue higher education. A loan of upto Rs.10 lakh would be given by banks with government staying as a guarantor. Once the student completes his education and with a gap of a year the loan will have to be repaid.
The repayment period is earmarked at 15 years and the interest rate will be the base rate with 2% extra. The loan will cover tuition fee as well as the living expenses. The scheme also has an insurance with a varying premium as mandatory.
The scheme would be implemented with all government institutions and private institutions with NAAC, NBA rating, self financing institutions affiliated to Guru Gobind Singh Indraprastha University (GGSIPU) and institutions which have A+, A and B rating with state fee regulatory committee (SFRC).
The scheme has been prepared by a committee consisting of secretary education, vice chancellors of Indraprastha University, Delhi Techological University (DTU), secretary finance who is the chairman of the committee along with representatives from Indian Bankers Association.