Government to consider proposal of subsidy on education loan interest

The interest portion of the education loans may dip if the government's proposal of subsidizing these rates comes through.

The government is considering a proposal to subsidize the interest component on loans given to students for higher professional courses during moratorium period.

Media reports say that the subsidy proposal is being considered on education loans taken by students having lower than a specific parental income for pursuing professional education in India under the revised Model Educational Loan Scheme formulated by the Indian Banks' Association (IBA).

Rs. 4, 000crore has been allotted in the 11th plan to offer subsidy on interest on education loans.