New Education Loan Scheme: A Pathway to Empowerment for Students

Introduction to the New Education Loan Scheme

As part of the Union Budget 2024-25, a transformative education loan scheme has been announced, which aims to provide e-vouchers to one lakh students each year. This initiative allows students to secure loans of up to ₹10 lakh for pursuing higher education in domestic institutions, significantly enhancing access to education.

Key Details of the Education Loan Scheme

• Loan Amount: Up to ₹10 lakh.
• Interest Subvention: An annual 3% interest subvention will be provided.
• Target Beneficiaries: One lakh students per year.
• Purpose: To support higher education in domestic institutions.

Impact on Students

• Financial Relief: This scheme will significantly reduce the financial burden on students and their families.
• Increased Enrollment: By making education more affordable, it will promote higher enrollment rates in domestic institutions.
• Empowerment: Aspiring students will be able to pursue their academic goals without the constraints of financial limitations.

Expert Opinion

Professor Mahadeo Jaiswal, Director of the Indian Institute of Management, Sambalpur, stated, "This initiative will undoubtedly empower many aspiring students to pursue their academic goals without the burden of financial constraints and increase job opportunities."

Additional Announcements in the Union Budget

• Ministry of Education Allocation: The total allocation for the Ministry of Education is ₹1.2 lakh crore, reflecting a 7.14% increase compared to last year's ₹1.12 lakh crore, though it is a decrease of 6.97% compared to ₹1.29 lakh crore in revised estimates for 2023-24.
• Model Skill Loan Scheme: This scheme offers loans up to ₹7.5 lakh, guaranteed by a government-promoted fund. It aims to assist 25,000 students annually and is a revised version of the Skill Loan Scheme initially launched in 2015.
• Disbursement: In the year 2018-19, a total skill loan of ₹29.06 crore was disbursed by 21 banks.

Significance of the New Schemes

• Financial Accessibility: The education loan scheme with interest subvention enhances access to higher education by lowering loan costs.
• Encouraging Domestic Education: By focusing on loans for domestic institutions, this scheme aims to strengthen the higher education sector within India.
• Support for Skill Development: The revised Model Skill Loan Scheme supports vocational training and skill development, essential for improving employability.

Conclusion

The Union Budget 2024-25 introduces crucial measures aimed at supporting higher education and skill development through affordable loan schemes. The ₹10 lakh education loan with a 3% annual interest subvention and the revamped Model Skill Loan Scheme are poised to provide significant financial relief, promote higher education, and enhance employability by supporting skill development.