New Delhi: Finance Minister P. Chidambaram today announced a Moratorium period for all education loans taken-up to March 31, 2009 and outstanding on December 31, 2013.
He said, government will take over the liability for outstanding interest as on December 31, 2013, but the borrower would have to pay interest for the period after April 1, this year.
Nearly 9 lakh students borrowers will benefit to the tune of approximately Rs 2,600 crore.
Presenting the Interim Budget, Chidambaram said that a sum of Rs 2,600 crore will be provided in the current financial year itself and this amount will be transferred to the Canara Bank.
Chidambaram said the Central scheme for interest subsidy was introduced in 2009-10 in respect of education loans disbursed after 1.4.2009.
However, students who had borrowed before 31.3.2009 struggled to pay interest during the period of study and they deserved some relief.
He said, ten years ago, only a few thousand students- mostly the well-connected- got education loans.
At the end of December 2013, Public Sector Banks had 25,70,254 student loan accounts and the amount outstanding was Rs. 57,700 crore.
