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Helping hand for higher studies

A handful of banks have come to the students' aid, offering educational loans so that they can fulfill their dreams.

india Updated: Nov 14, 2006 17:37 IST

Even as it is becoming necessary for students to pursue higher studies for gaining competitive edge in his/her career, education is becoming costlier by the day. This takes its toll on parents too. Footing huge college bills when they are ill equipped for it is no easy task.

However, for young scholars with a good academic record, nothing stops them from fulfilling their dreams. A handful of banks have come to their aid, offering educational loans.

For parents, the unpredictability arises from various situations. They are particularly based on the rank of the student and the status of an institution - aided or un-aided - that one wishes their children to join.

Ready reckoner

Expenses considered

Fee payable to college, school,hostel etc.

Examination/library/laboratory fees

Purchase of books,equipment, instruments, uniforms

Caution deposit, building deposit, refundable deposit

Travel expenses for the studyabroad

For purchase of computers, if necessary

Cost of a two-wheeler in somecases

Documentation required

Mark sheets of the last

qualifying exam

Proof of admission to

scholarship or studentship

Schedule of expenses for the

specified course

Two passport-size photographs

Borrowers' account statement for

the last six months

Income-tax assessment order of the last two years

A brief statement of assets and liabilities of the co-borrower(usually parents) Proof of income

The annual fees of un-aided and partly aided institutions are going up year after year. For example, the annual fee at the Indian Institute of Management (IIM), Ahmedabad, has gone up from approximately Rs 3,000 in 1983 to Rs 175,000 today. Severe are the problems faced by parents of students who fail to find seats in government medical and engineering colleges.

For the same course, the difference in annual fee between private and government colleges is huge, sometimes going beyond five times the fee charged in government colleges. However, this differs from state to state.

For example in Maharashtra, private engineering colleges charge Rs 45,000 per annum, while in government colleges it is Rs 15,000.

Government initiative To provide access to higher education in the country, and at the behest of the Centre and the Reserve Bank of India (RBI), banks agreed in 2000, to provide loans of up to Rs 7.5 lakh for studies in India and Rs 15 lakh for studies abroad. There are some public sector banks that offer loans above these limits in specific cases. These public sector banks follow the RBI guidelines.

These norms limit the interest rate charged to the benchmark prime lending rate (BPLR) of the respective bank for loans up to Rs 4 lakh and at BPLR plus one per cent above Rs 4 lakh.

First Published: Nov 06, 2006 17:03 IST