MAHARASHTRA GRAMIN BANK
MODEL EDUCATIONAL LOAN SCHEME FOR PURSUING HIGER EDUCATION IN
INDIA AND ABROAD
1.

INTRODUCTION:

Education is central to the human resources development and empowerment in any country.
National and State level policies are framed to ensure that this basic need of the population is met through appropriate public and private sector initiatives. While government endeavour to provide primary education to all on a universal basis, public funding of higher education is not considered feasible. Cost of education has been going up in recent times and since the student has to bear most of the cost, there is a clear case for institutional funding in this area. This model education loan scheme is an attempt to bring out a viable and sustainable bank loan scheme to meet the aspirations of our society.
Knowledge and information would be the driving force for economic growth in the coming years. The current rate of economic growth of the country demands technically and professionally trained man power in large numbers. In this backdrop, loans for education is seen as investments for economic development and prosperity. The model Education Loan Scheme was developed by the Indian Banks’ Association to help meritorious students pursue higher education in technical and professional courses. As the focus is on development of human capital, repayment of the loan is expected to come from future earnings of the student after completion of education. Hence the assessment of the loan will be based on employability and earning potential of the student upon completion of the course and not the parental income/family wealth.
Based on recommendations made by a Study Group, IBA had prepared a Model
Educational Loan Scheme in the year 2001 which was advised to banks for implementation by
Reserve
Bank of India vide circular