Interest Free Loans to IIT Students

Press Information Bureau 

Government of India

Ministry of Human Resource Development

04-August-2016 17:05 IST

Interest Free Loans to IIT Students 

It has been decided to provide interest subvention on the education loans, for all students admitted for undergraduate and the 5-year integrated degree programmes in IITs, covering the period of the study plus one year of moratorium under the Vidyalaxmi Scheme, subject to the following guidelines: 

(i) The facility shall be made available to all the students whose household income does not exceed Rs. 9 lakh per annum. 

(ii) The education loan, for this purpose, shall cover only the tuition fee payable by the student as per his eligibility. The portion of the tuition fee paid by the student from his own sources at the time of securing admission could be reimbursed from the overall loan. 

(iii) The terms of the loan shall be in accordance with the broad contours of the Educational loan Scheme of the Indian Banks’ Association (IBA) for pursuing Technical/Professional Education studies in India. 

(iv) The term of the loans sanctioned under this dispensation shall be 10 years. 

(v) There shall be no collateral for sanction of the loan except the personal guarantee of the student (applicant) and the parent/guardian (co-applicant). 

(vi) The subvention of interest (on equated basis) shall be applicable for a maximum period of 5 years (which may include a one year moratorium). 

(vii) After the expiry of the above period, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing educational loan scheme of the Banks and as may be amended from time to time. 

(viii) This facility is applicable only to the loans taken by the students who secured admission into the undergraduate courses of IITs (including the integrated courses) starting from the academic year 2016-17. 

(ix) The interest subvention is subject to the satisfactory performance of the student in the institution. 

(x) Payment of the interest subvention shall be from the internal accruals of the IIT. 

However a Central Sector Scheme to provide interest subsidy on educational loan (CSSIS) is presently operational which provides full interest subsidy during the period of moratorium (course period + one year) on loans taken by students belonging to EWS from Scheduled banks under the Model Educational loan Scheme of the IBA for pursuing any of the approved courses of studies in technical & professional streams, from recognized institutes in India. 

This information was given by the Minister of State (HRD), Dr. Mahendra Nath Pandey yesterday in a written reply to a Rajya Sabha question. 

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Setting up of 20 new Indian Institutes of Information Technology (IIITs) with Public Private Partnership (PPP)

The Union Cabinet yesterday approved the setting up of 20 new Indian Institutes of Information Technology (IIITs) with a Public Private Partnership (PPP) model with an outlay of ` 2808.71 crore (` 2558.71 crore for non recurring, ` 200 crore for recurring expenditure and ` 50.00 crore for faculty development expenditure). The proposal includes:

• The capital cost of each IIIT will be ` 128.00 crore to be contributed in the ratio of 50: 35: 15 by the Central Govt, the State Govt, and the industry respectively (57.5 : 35: 7.5 in case of North-Eastern region). In addition, ` 50.00 crore will be provided by the Central Government for faculty development programme for the faculty of new IIITs as well as existing IIlTs and IISERs. During the first four years of setting up each IIIT, the Central Government will provide partial support towards the recurring expenditure upto ` 10 crore to each IIIT depending upon actual requirement of IIIT.

• The project shall start from the financial year 2011-12 with setting up 5-10 IIITs depending upon the response of the State Governments and private partners.

• Each IIIT shall meet its operating expenditure on its own within 5 years of commencement out of students fees, research and other internal accruals.

• The concerned State Government will provide 50-100 acres of land, free of cost.

• The Governing Board of IIIT will be empowered in the matters relating to student intake, fee structure, faculty/non faculty salaries, creation of faculty and non faculty positions, recruitment norms etc

• In principle approval for introducing the Indian Institutes of Information Technology Act, 2010 for setting up new IIITs and declaring them as Institutes of National Importance. Since this process is time consuming, the IIITs may, initially, be registered as Societies under the Societies Registration Act 1860.

• To put in place a tripartite MoU document spelling out the role and responsibilities of private partners vis-a-vis that of the Government. • To work out the modalities and detailed plan for the faculty development for new IIITs as well as existing IIITs and IISERs in consultation with the Ministry of Finance.

The Indian Institutes of Information Technology (IITs) will be world-class Institutes and will be set up as autonomous institutes based on Public Private Partnership (PPP) model. Each Institute is meant to specialize in application of IT skills in one or more domain areas. One of the important criteria for setting up IIIT in a State will be availability of 50-100 acres of contiguous land or a minimum of 50 acres of land, with additional land available at another site in the State, which shall be made available, free of cost, for the establishment of the Institute. Initial capital for establishment of the Institute shall be contributed by the Central, State Governments concerned and industry.

The new IIITs will produce world-class high quality technical personnel, which will generate manpower for emerging industries, science departments and laboratories. This will, in turn contribute to the development of industries and finally boost the economic growth of the country. IIITs will develop professional expertise and skilled manpower in IT and its applications to certain domain areas.

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Source;PIB (Release ID:68209)

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