Govt education loans to be interest-free now: Nitish

Patna: CM Nitish Kumar on Tuesday announced that students passing Class XII examinations from the state will now get interest-free loans to pursue higher studies under the Student Credit Card Scheme. Earlier, education loans of up to Rs 4 lakh were provided at an interest rate of 4% to general male applicants and 1% to female, differently-abled and transgender applicants under the scheme.

Along with making the loans interest free, the govt has eased repayment terms. Loans up to Rs 2 lakh, earlier repayable in 5 years, will now be cleared in 7 years. For loans above Rs 2 lakh, capped at Rs 4 lakh, the repayment tenure has been extended from 7 years to 10 years.

Announcing the changes on his social media account, Kumar said, “Our aim is to see that more and more students get higher education. The new facilities provided in education loans will increase their confidence level. They will pursue higher education with greater enthusiasm and dedication and build upon not only their own future in the chosen arena, but also improve the future of the state.”

The CM recalled that the scheme was first launched on Oct 2, 2016, coinciding with Mahatma Gandhi’s birth anniversary. Initially, loans up to Rs 4 lakh were given at 4% interest to general category students, while girl, physically challenged and transgender students were charged 1%. “In the changed situation, they all will get interest-free education loans,” he said.

The scheme was initially routed through banks before being shifted on Apr 1, 2018, to Bihar State Education Financial Corporation Limited. Applications have grown steadily over the years – 19,291 male and 5,939 female students in 2018-19; 23,971 and 11,477 in 2019-20; 30,968 and 12,817 in 2021-22; 32,548 and 14,215 in 2022-23 and 29,171 and 13,204 in 2023-24.

Loans under the scheme are available for undergraduate, postgraduate and professional courses, as well as polytechnic and industrial training institute programmes.