Education loans help students from various walks of life to follow their dreams and pursue the educational course they like. One can easily find lenders who provide attractive education loans by searching on the internet. However, a student must bear in mind a few parameters and regulations when taking student loans. With the Indian government launching new policies every now and then to help refine the structure of students taking education loans, this is the golden era for ambitious young minds who wish to pursue the course of their dreams.

The latest policy launched by the Indian government aims to increase the number of international students pursuing their higher education in India. If you wish to understand what this policy means for overseas students, read on –

1. The new policy aims to attract overseas students to India

The recent policy launched by the Indian government allows lenders in the public sector to provide education loans to overseas students. This policy aims to increase the number of Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian origin (PIOs) pursuing their higher studies in India. This is an important step in the Indian education system as the ratio of international students is an important factor of consideration when computing the global rankings of Indian universities and colleges.

2. The new policy also covers student exchange programs

Student exchange programs are essentially the initiatives undertaken by local universities/colleges to send their students abroad to a partnered foreign university for a period of 6 months or a year to pursue their education. To be eligible for this, the student has to provide his/her Aadhaar card and PAN card details at the time of applying for the education loan. If for any reason, the student does not have their PAN card when applying for the education loan. In that case, the financial institution can give the applicant a time extension of up to 6 months after loan disbursal, within which the required PAN card details need to be submitted by the student.

3. The new policy provides multiple alternatives

If the student does not have a credit history to support their loan, it is mandatory for the applicant to have a co-applicant who is a resident of India. This can either be their parents, legal guardian, or a relative who resides in India. The transaction is processed in Indian currency. If the student wishes to partake in the student exchange programs, he/she would also need to provide a copy of their passport to the lender while applying for a student loan. The loan provider can also frame conditions in their own accordance considering their risk appetite.

4. The policy ensures appropriate financing

The scheme applicable to education loans earlier had capped the maximum loan amount at Rs.10 lakhs for students planning to pursue their higher education in India. For students planning to pursue their education abroad, the maximum loan amount was capped at Rs. 20 lakhs. However, the latest policy has not defined such a limit for education loans as of yet. This is greatly beneficial for students as they can now get a higher loan amount to manage their expenses rather comfortably.

We hope this helps you understand the latest policy launched by the Indian government for education loans.