Now, student loan waiver on the cards

Now, student loan waiver on the cards

Chief Minister H D Kumaraswamy

Chief Minister H D Kumaraswamy on Tuesday announced that the government was considering writing off education loans borrowed by students from the economically-backward families.

“I’m getting data...I have asked officials to compile information on student loans that are outstanding,” Kumaraswamy told reporters.

The idea of waiving student loans came to him during his janata darshan (public meeting) events, he said. “Several aged parents met me seeking my help. They’d taken loans with great difficulty to ensure their children get education. But then, some of the students may not have landed jobs. Keeping in mind these difficulties, I’ve sought information on how much loans students have borrowed,” he said.

It was reported that the government was considering waiving loans borrowed by SC/ST students. When it was pointed out that several such welfare schemes launched by the previous Congress government focused on some communities, Kumaraswamy was quick to clarify: “This government will not differentiate.”

According to an estimate by the State Level Bankers’ Committee (SLBC), education loan borrowings for 2018-19 could run up to Rs 4,604 crore across commercial banks, grameen banks, cooperative banks and others. In 2017-18, various banks in the state sanctioned education loans to 3,98,94 beneficiaries.

At present, the state government runs the Rajiv Gandhi Loan Scholarship scheme in which the interest on the principal amount is paid by the government during the moratorium period. Students whose annual family income is below Rs 2.5 lakh are eligible under the scheme.

The proposal of writing off student loans comes even as the government is in the process of implementing a massive crop loan waiver amounting to Rs 45,000 crore, which will benefit 44 lakh farmers. “Nationalised banks have agreed to come in line with the government’s vision for the loan waiver. Starting November 1, the government will release funds to the banks in lieu of the loans that have been waived,” Kumaraswamy said.