Higher Education and Skill Development Credit Guarantee Scheme Delhi | Educational Loan for Delhi Students
The state govt. of Delhi has launched a new scheme for providing opportunity to the students of higher secondary level so that they can get higher education after their schooling. This scheme is one of the seventy promised schemes or better known as action points proposed by the state govt. of Delhi. The new schemes is for providing higher education in degree or diploma level and make them equipped to get jobs and get employed. In addition to this, the new scheme will also have skill development course facilities for the students to get better exposure of practical knowledge and grab jobs efficiently. The students who are getting education from Delhi can get advantage from this scheme where they will get credit for pursuing higher study courses. There is no restriction and every student who hails from Delhi and is studying in Delhi schools can get benefitted from this govt. scheme.
Main motto behind this scheme
All the deserving and meritorious students who needed proper financial support to carry on with their higher studies will be directly benefitted by this state govt. sponsored educational and skill development scheme. Those students irrespective of their social and economic background can apply for this scheme. This scheme aims not only to maximize the number of students pursuing degree and diploma courses in the state but also to provide skill development and professional courses to them so that they can become job ready and grab employment opportunities easily.
Funding features of the Higher Education Credit Guarantee Scheme (HECGS)
The Delhi Govt. has already set up a huge corpus for implementation of the scheme across the state. The fund for this HECGS project has been sanctioned in the last budget sessions. The fund amount for the HECGS is Rs. 30 crore. Those banks who want to join in this project must abide by some regulations laid by the Govt. for the credit guarantee scheme. At first, the participating bank in the HECGS must be a member of IBA and identified by the RBI. At first, the banks will have to pay an annual fee of 0.5 per cent of the total outstanding amount. This fee is termed as AGF. This fee must be collected within 30 days of the credit guarantee. After this, the AGFs in the upcoming subsequent years will be calculated and collected as per the credit amount outstanding at the start of the financial year. In case a financial institute suffers from loan default or the claim of loan been invoked, the Govt. will also make negotiations with the financial institute and help settling the credit amount. At first the Govt. will settle 75 per cent of the total amount of loan default with the bank. Then it will start the recovery procedure in accordance with law. After that, the final 25 per cent of settlement will be done.
Eligibility criteria for students joining in the Higher Education Credit Guarantee Scheme
- This is one educational scheme which provides credit guarantee and financial support to students of every criterion. There are several similar projects only for students with scheduled castes, scheduled tribes, weaker sections, BPL families, etc. But this is an open to all scheme sponsored by the state govt. of Delhi. For all the students who have completed their Class 10th and 12th standard in Delhi are fully eligible for the HECGS to get further higher education. Many higher courses can be done only just after completion of 10th standard such as engineering and poly-technique diploma courses. Hence for getting advantage of HECGS project, one must complete their Class 10th standard from the state of NCT only. Same is the criteria for those course, mostly degree ones, which has minimum educational qualification of Class 12th
- All the students whose wardens are the govt. employees who are either working with the state govt. of Delhi or the central govt. but posted in Delhi are also eligible for the HECGS provided they are continuing their education from NCT.
- Those students are also eligible to join the scheme that are going to get admissions in the diploma or degree level courses or any skill development professional course in the state of NCT. But the only condition is that they must undertake such admissions only in the recognized institutions via the state held or national level entrance examinations.
Nature of educational institutes for getting eligibility for HECGS
The Govt. of Delhi has set some basic guidelines regarding the nature of educational institutions where the students must take admission and carry on their higher studies. All the colleges affiliated to Delhi University are registered and students will get full benefit of the HECGS. Apart from this, for private universities and educational institutions, it is very important to have necessary certifications like having grading from SFRC or NBA or NAAC. The Govt. of Delhi has already given circulars to all recognized private educational institutions operating in the state of Delhi to get them graded with NAAC or NBA as Grade A or Grade B from NAAC/NBA will only be considered for inclusion in the scheme. For now SFRC grade might work, but the Govt. is pushing the operational educational institutes for the NBA or NAAC accreditation. For the other professional and skill development institutions, they must have necessary certifications recognized by the state or central govt. on the basis of their job-ready courses.
Which expenses will be covered under the Higher Education Credit Guarantee Scheme?
The Govt. has set some guidelines regarding which expenses can be claimed for the credit loan facility. The course fee or the tuition fee applicable for the course will be covered under the HECGS. Apart from this, other fees like hostel fees, library charges, laboratory fees, examination fees, etc. will also be covered. In case of hostel fees, for those educational institutions which do not provide hostel facilities, students can opt for outside private accommodation of hostel but at reasonable charges. Many colleges charge a one-time caution deposit which is kept with the college administration till the termination of course. This caution deposit will also be eligible for loan. However, this caution deposit must be within 10 per cent of the total fees for tuition of the whole course. The expenses to be incurred for book purchase, uniform preparation and other necessary equipments and lab instruments can also be included and are eligible for loan subjected that they are advised by the educational institute and have realistic budget. Also students will get to include the expense of purchasing a computer for educational purpose only but only within reasonable limits. For those courses which include study tours or thesis work, expenses for those will also be considered for the credit guarantee project.
Guidelines for the students already applicable for merit scholarships and fee weaver
The students who are already eligible for the merit or other scholarships can also opt for the credit guarantee scheme by the Delhi Govt. There are numerous students mostly belonging to backward classes, scheduled castes, scheduled tribes, etc who get fee weaver from the govt. For those students, the amount paid in form of scholarship or fee weaver will be also be assessed before finalizing the loan amount to be provided. The scholarship scheme will be directly linked with the loan account of the student after the sanction of the loan. Hence, all funds received as scholarship from the govt. will automatically get credited in the loan account under the HECGS.
Which courses are eligible for the Higher Education Credit Guarantee Scheme?
All diploma, degree and post graduate courses from the colleges and educational institutions recognized by the UGC for academic courses and AICTE for technical courses are eligible for the credit scheme. Also educational institutes recognized by ICMR and AIBMS are considered. Courses from other premier institutes like the IIT, IIM, NLU, IIFT, NIFT, etc. are also eligible for loans. Commerce courses like CA, ICWA etc. can also be done by taking educational loan under this scheme. For professional courses like aeronautical and pilot training, they must be approved from DG Civil Aviation. Similarly for the shipping courses, the regulatory body is DG Shipping. Also for the nursing courses, the institutes must have accreditation from the INC. For all skill development courses, the state govt. of Delhi is the approver of the institutes on the basis of employability provided by them. The banks or educational institutes must verify the certification and necessary approvals of the educational institutions while sanctioning education loans. But all the fees of the institutes must be govt. regulated so that loans can be sanctioned under the credit guarantee project.
Credit guarantee scheme applicable for management quota admissions too
The students who enroll themselves to the educational institutions for pursuing higher studies through management quota are also eligible for the credit guarantee scheme. The course fees for the management quota seats must also be approved and well regulated by the govt. The loan will be sanctioned considering the viability of loan repayment by the borrowing party under management quota.
Credit limit under the Higher Education Credit Guarantee Scheme
The Delhi govt. has set a credit limit for the education loans to be sanctioned under the new scheme for students to pursue higher education in the state. The maximum limit of loan is Rs. 10 lakh up to which students will get easy credit for performing their higher studies in the colleges and other educational institutions within Delhi. Loans amounting up to Rs. 7.5 lakh will be termed as ordinary education loans as will be sanctioned by the financial institutions upon application. However, for time being, those educational institutions which are privately operational and do not have NAAC or NBA accreditation but have grading of SFRC above A will also be considered for the credit guarantee project.
Security deposit on the loans
What makes this credit guarantee scheme by Govt. of Delhi stay ahead of other educational loans available in the market is that, there is no such security or mortgage to be kept while taking the loan. In other forms of educational loans amounting to Rs. 10 lakh, banks do take security deposit or mortgage of property or other valuables. But in this case, only the parents or the legal guardian of the student must be a co-borrower of the educational loan. In case, the borrower is married, then the joint account loan account holder can be the spouse or in-laws. The loan documents furnished from the party must have documents of verification of the parent or legal guardian as well the student.
Rate of Interest of the credit guarantee scheme
The govt. has however set no fixed rate of interest on the educational loans under the credit guarantee scheme for pursuing higher education by students of Delhi. Banks and financial institutions can charge their own rate of interest on the educational loans. However, there is a fixed base rate of interest on educational loans which is already fixed by the RBI. The banks are allowed to charge a maximum rate of interest of the base rate plus 2 per cent. Students will always have option to pay the interests accumulated over the course duration. The accumulated interest along with the principal amount will be considered for loan repayment. Banks will offer easy schemes of monthly repay installments to the students so that they can repay the loan after getting employment.
Terms and conditions on repayment of loan
The set repayment moratorium or also known as the holiday period in terms of loans is one year in addition to the period of course. Hence, there will be no such penalty to be charged by the banks if loan is repaid within due course. There might be several unavoidable instances where the student is unable to complete the course within the stipulated time period. In that case, the students will get a maximum grace period of 2 years for completing the course. And in case of discontinuity of course from the student’s side, special repayment procedures will be sorted out with consultations with the parent or student by the bank authorities. Students are free to pay back the interest levied on their loan amount while pursuing the course. This will attract an interest concession of 1 per cent, which is very advisable and benefiting for the students. After the start of repayment of loan via EMIs designed by the bank, the students can opt for longer tenure of loan repayment up to 15 years. There are several jobs like professions of lawyers, doctors, etc. where salary or income structures at the beginning of the career are on the lower side. For this, the scheme also allows to step up the EMIs according to the growth of salary. After the full repayment of loan amount along with the interest incurred, the loan account will be closed by the bank and a NOC will be provided to the student which is the proof of no dues from the financial institution.
Insurance on loans
The scheme gives independence to the banks or other financial institutions to arrange insurance scheme for the students enrolling for education loans under the new credit guarantee scheme for pursuing higher education in Delhi. Parents/students are also free to figure the insurance conditions with third party insurance agencies. The central govt. insurance schemes like the PMJJBY or the PMSBY can also be utilized by the beneficiaries for getting insurance cover.
Procedure of sanction of educational loans
All loan applications can be done through both online as well as offline mode. The state govt. will have a dedicated web portal for online submission of loan applications. Simultaneously, the beneficiaries can directly visit the banks for offline mode of application. After submission of application, an acknowledgement will be provided from the bank’s side which will have a unique acknowledgement number. After application is submitted, the bank authorities will give the information of acceptance or rejection of loan to the applicant, within the period of 15 days of application. The loan appraisal will be chalked out and the loan amount will be sanctioned as per the income prospects of the student after the course completion. In case a loan application is rejected, the bank must at first report the same to the state government’s educational governing body and then send intimation to the student stating the reasons of regret of loan application. After the sanction of loan is done, the loan amounts will be disbursed directly to the educational institution linked with the loan account in form of installments as required. For example, the semester fees for each semester for a professional course will directly be transferred to the institute’s account. After a loan is sanctioned, the same will be stored in the database of the portal maintained by the govt. There are however no such charges for processing of educations loans under this scheme.
Credit score on loans
Bodies like CIBIL monitor the loan repayment flow and calculate credit score accordingly. If there is a default in loan repayment and EMIs are not paid regularly, then the credit score of the borrower will get affected. This will have adverse effect on the future loan processing by the student or the parent. Hence, it is advisory to keep the credit score ok and repay the EMIs regularly.
State Level Bankers Committee (SLBC) to be formed
The Govt. will also form a committee named the SLBC which will convey all the reports of the scheme operations to the governance authority. A separate grievance management team will also be chalked out to deal with all the complaints and grievances lodged by the students. Also necessary remedial measure in case loan application is rejected will be conveyed to the students by this body. The monitoring of the loans will also include the details of proceedings on the recovery and repayment of education loans. Necessary and periodical meetings will be organized by the committee with the govt. authorities to discuss on the proceedings and other required inputs in the credit guarantee project.
Guidelines of documents needed
The students can apply for the educational loan under this project from the bank branch which is either near to their educational institute or near their residential place. However it is always advisable to create loan account with the branch affiliated to the institute or nearest to the institute for easy access of loan services. All KYC verification of student as well as the legal guardian or parent will be done. As the scheme is meant only for students residing or getting higher education in the state of Delhi, hence they are also required to provide domicile certificate. The residing certificate must be issued by approved issuing authority such as Executive magistrates, SDOs, etc. The banks will use Aadhar and PAN details to link the loan accounts.
Top up on loans
Another advantage of this scheme is that the student can pursue for another higher or further study after the completion of the enrolled course and will be eligible for a top up of loan. The overall eligibility criteria like the net limit of loan amount will remain the same. The repayment process will also be changed and loan EMI will start only after the student finishes the next course. There is also no bar on the total no. of applicants from a same family. A student can also get a loan under the scheme even if a previous loan is already sanctioned under his / her name.
Age criteria for loans
The govt. has not set any fixed age criterion fir eligibility of education loans under the new credit guarantee scheme to get higher education in Delhi. However, in case the loan was sanctioned at the time the student was a minor, then necessary documentation must be made after the student attains the majority age and same to be conveyed to the bank authorities.
Few important data of the scheme:
|Sl. No.||Attributes||Related data|
|1||Name of scheme||Higher education and skill development guarantee scheme|
|2||State of implementation||Delhi|
|3||Budget allocation||Rs. 30 crore|
|4||Necessary accreditation of educational institutes||SFRC / NBA / NAAC with Grade A or Grade B|
|5||Maximum loan amount||Rs. 10 lakh|
|6||Rate of interest||Base rate + 2 %|
|7||Maximum repayment period||15 years|
|9||Bank committee for project discussions with govt.||State Level Bankers Committee (SLBC)|
|10||Governing authority||Directorate of Higher Education, Delhi|