Paying off Education Loan in India

Education is perhaps an individual’s most precious resource today. In fact, nowadays education is at times equated to an investment, which in all truth it is. However, if we purely take perspective at education as an investment point of view, the price of education at times requires you to take loans from banks or other sources, which require you to pay off the debt after your “investment” or education starts bearing fruits. As easy as loan grant sounds, the more difficult it can be to pay off. However with careful planning and timely repayments, one prevents himself/herself from coming under what is called “debt pressure”. 

Education loan is basically an amount bank has paid on your behalf. So with every passing day, this loan accrues some interest. You pay this loan in EMIs because you cannot pay off all the loan amount i.e. principal and interest at one go. So one way to limit the interest that you will pay on education loan is to pay it off as early as possible. But education loan also helps you save Tax under section 80E. We have created an excel sheet that will help you decide when to pay off the education loan.

If you cannot prepay the loan, follow these tips while paying EMI on the education loans in India:

1)      Start Early:
Don’t wait till your graduation, to start planning on the repayment. Have a repayment model ready as soon as the first phase of education (generally the first semester) is over. This will enable you start saving early and gradually ease off the pressure of the interest which piles up and by the time of moratorium period ends, you would have already started with the repayment. If you have some savings already in your account when you graduate, you could start paying the loan even before the moratorium period begins. Do keep in mind that your loan is accruing interest even during the moratorium period.

2)      Set a comfortable EMI. Don’t be over ambitious: 
Setting a lower EMI for a longer duration might just be a better option than ambitiously trying to pay off the loan early. Paying off the loan early is always the better option, but not by compromising on other important needs like lifestyle expenses or training costs for furthering professional skills.

3)      Prefer a loan from Government Bank (or PSU Banks):
PSU banks typically offer loans at lower rates than private banks. They are also more lenient when it comes to prepayment of the loan. E.g. Andhra bank does not levy any charges for partial or full repayment while HDFC banks charges penalty proportionate to the amount of loan outstanding.

4)      Speed up the repayment using the tax benefits:
Education loans provide you tax benefits and the amount that you save can actually be used quite significantly for paying off your debt faster. One way to do this is calculate the amount that you save exclusively from taxes and deposit it biweekly along with the ongoing EMI. This might seem insignificant in the short run but saves you almost 3-4 months during the final payment which results into about 25-30% lesser interest being paid.

5)       Accelerate your payments by adding very small amounts: 
This is the Best Education loan strategies. Even if you add ~100 extra every month for just 2 years consistently, you can save up to ~20,000 in interest and you will end up finishing an 110 month loan in 106-107 months saving 4 months.

Source: (https://educationloansinindia.wordpress.com/2015/12/01/paying-off-education-loan-in-india/)

Education loan for MBA: Need an education loan? Banks may shut door on you

Securing an education loan for the upcoming academic session is set to be a difficult task, with several banks not keen on lending to students owing to a large number of defaults. The default rate, credit experts said, is high – 5% to 10% – in the education loan segment as against home and car loans (1.5%).

As a result, the growth rate of education loans has been steadily declining. Data from the Reserve Bank of India (RBI) revealed that in 2014-15, the segment grew just 5.7% year-on-year compared to 9.2% in 2013-14, 10% in 2012-13 and 10.36% in 2011-12.

“Asset quality is a big concern for banks as the job market is not robust or is not paying enough for borrowers to pay off loans,” said Anuradha Rao, who heads personal banking at State Bank of India (SBI), the country’s largest public sector lender.

Adding to the reluctance of banks to disburse education loans, the IBA has listed only 1,100 accredited institutions.

Ramesh is not an isolated case. A large number of students are often in a fix when it comes to repaying their education loans. The repayment process usually starts after the ‘moratorium period’, which is either a year after the end of the course or six months after getting a job, whichever is earlier.

The percentage of students taking a loan and the amount varies based on institutes and streams. According to experts, getting loans is more difficult for students who are not applying to top institutions or those who want to pursue off-beat courses. At premier institutions, such as the Indian Institutes of Technology (IIT) and Indian Institutes of Management (IIM), 30% students from a batch usually apply for loans. Students pursuing engineering typically apply for loans in the range of Rs. 7 lakh to Rs. 10 lakh, while those studying management tend to borrow between Rs. 10 lakh and Rs. 40 lakh.

While some top institutes such as IIM-B have started their own financial aid departments, where help, apart from scholarship from the government, is provided to students, others have tied up with various public sector banks to offer loans. Central Bank of India, for instance, provides a loan of up to Rs. 20 lakh with no collateral for students of IIMs. SBI also has special education loans for students securing admission to IITs, IIMs, NITs, AIIMS and other reputed institutions.

Also, a recent proposal by the central government is likely to encourage banks to disburse more education loans without worrying about defaults. The government is looking to create a Rs. 1,000-crore credit guarantee fund for education loans that banks can draw upon in case of defaults. It aims to guarantee a cover of up to 75% of the loan amount.

Bankers, however, are not entirely convinced. “While education sector needs such financial assurances, which will also benefit meritorious students, the risk factor for banks has not been taken into consideration entirely,” said a Canara Bank official, who did not wish to be named.

Credit Score Scare

The Credit Information Bureau (India) Limited (CIBIL) had recently announced that non-repayment of education loans will affect one’s credit score. A credit score reflects the financial health of an individual and is an important parameter for obtaining Education loan for MBA in the future.

Source: (https://educationloansinindia.wordpress.com/2015/11/27/education-loan-for-mba-need-an-education-loan-banks-may-shut-door-on-you/)

Study loan: Know Who's Who in the Student Loan World

With Thanksgiving just around the corner, many of us will soon have large get-togethers with family and friends to celebrate. These gatherings have the Student Loan Ranger picturing the "extended family" of a student loan. You'd need a big table to seat them all.

It's always awkward to make small talk with your great aunt or second cousin if you don't actually know who they are. To avoid a similar fate when you run into a member of your loan's family, let's make sure you're familiar with what each one does.

• William D. Ford Federal Direct Loan Program: As of July 1, 2010, all federal student loans are originated through the direct loan program. These loans include Stafford loans and PLUS loans, and the U.S. Department of Education serves as their sole lender.

• Federal Family Education Loan Program: Before July 1, 2010, students could borrow federal student loans through the federal direct loan program or through FFELP. The biggest difference between the two is that FFELP allowed students to borrow from a private lender, not the federal government.

Many federal student loan benefits, including some income-driven repayment plans, are restricted to direct loan borrowers only. However, FFELP borrowers have the option to consolidate their loans into direct loans to become eligible for these options. They can also access the "original" income-based repayment without consolidating.

• Your school: Your school always starts the financial aid process. Their financial aid office will determine your eligibility for aid, as well as award your federal student loans. This information will be included in your award letter.

Once you decide which loans to accept, and remember to think about the future when doing this, the school will originate your loans and schedule their disbursements. That means they determine how much of each loan you receive at a time and when.

• Your lender: This is who provides your loan funds. Within the direct loan program, your lender will always be the Department of Education. They'll send the money to the school, which credits it to your account.

Your school can also act as your lender, both for institutional aid and federal Perkins loans. Funding for new Perkins borrowers, however, has ceased.

For private student loans, a nonfederal financial institution such as a private bank or credit union acts as your lender. They will disburse your loan and set the terms and conditions for it. Your school will not facilitate this process, but they will certify that the loan amount won't be higher than your cost of attendance.

• Your servicer: While lenders provide the money, they often outsource the day-to-day management of your loan to a servicer. These organizations provide services like sending bills, collecting payments and providing customer service.

If you have questions about your bill or repayment options, contact your servicer. Servicers can also change frequently, so make sure yours has up-to-date contact information for you.

• Collection agency: If your student loans default, your lender, servicer, or the Department of Education may hire a collection agency. These companies specialize in the collection of delinquent or defaulted loans.

• Guarantor:  A guarantor is a nonprofit or state organization that works with your lender, servicer, school, and the Department of Education to help you successfully repay FFELP loans. If your FFELP student loans default, your guarantor takes ownership of them. Guarantors are not part of the direct loan program.

• Ombudsman: The Federal Student Aid Ombudsman Group helps borrowers resolve disputes about their federal student loans. If you can't resolve a dispute with your loan holder in any other fashion.

 • Consumer Financial Protection Bureau:  The CFPB serves as a financial services industry watchdog. For study loan, they track complaints made against lenders and servicers. They do this to provide information that can help borrowers choose service providers with good reputations. They also spot trends and suggest solutions to improve service to borrowers

• National Student Loan Data System: Like we said, you need a pretty big table to accommodate your loan's family. Fortunately, this federal database offers some figurative place cards and simplifies things for you.

SOURCE: (https://educationloansinindia.wordpress.com/2015/11/26/study-loan-know-whos-who-in-the-student-loan-world/)

Delhi Govt’s educational loans to students will help expand facilities & improve quality of institutions

The launch of the Education Loan Guarantee Scheme by the Delhi government to enable students of all universities, colleges, technical institutes, skill centres, polytechnics and ITI’s in the national capital to get an educational loan is a game changer that other states should adopt. Students preparing for courses like CA, ICWA or CFA and even those doing skill development courses specified by the Delhi government can also avail of the educational loan.

To meet the costs of the scheme the state government has set up a Higher Education and Skill Development Credit Guarantee Fund (HESDCGF) for providing guarantees to the banks against any default on these educational loans. It will have an initial corpus of Rs 30 crore and will also collect an annual guarantee fee of 0.5% of the outstanding amount of the loan from the banks each year.

In case of default by the students the HESDCGF will initially settle 75% of the claims of the bank after the initiation of the recovery proceedings and the remaining 25% will be settled after ascertaining the final loss of the bank at the end of the recovery process. The threat of defaults are to be minimized by making the parents or the legal guardian’s joint borrowers of the educational loan along with the student.  A default will also negatively impact the credit rating of the student and parents.

The educational loan would be available not only to students of government owned institutions but also to the private or self-financing institutions which have been a minimum grade of A+, A or B from either the National Assessment and Accreditation Council (NAAC), National Board of Accreditation (NBA) or the State Fee Regulatory Committee (SFRC).

The competition among educational institutions to attract more students and the government stipulations for securing accreditation by educational institutions providing admission to students availing educational loans will ensure improvements in quality of education. The educational intuitions would also be forced to improve the course content in tune with market needs to ensure employability of the students.

By liberally expanding the educational loan scheme the Delhi government has wisely chosen to follow the approach most popular with the governments in advanced economies. This would help expand educational loans as an important market to the banks like in the US where the outstanding educational loans of more than $ 1.3 trillion makes it the largest form of household debt next only to mortgages.

The liberal educational loan of the Delhi government, the risks of which are borne by the government, is in line with the practices in advanced countries like Australia, Canada, Denmark, England, France, Germany, Japan, Sweden and United States where the funds are provided by the government to improve student access to higher education. The shifting the burden of losses from the banks to the government is a landmark move which will give a big boost to higher Education loan in India and help roll out important national programs like the Make in India initiative and also build a new knowledge economy in tune with the needs of changing times.

Source: (https://educationloansinindia.wordpress.com/2015/11/23/delhi-govts-educational-loans-to-students-will-help-expand-facilities-improve-quality-of-institutions/)

How to get an Education Loan in India

How to get an Education Loan in India from Rahul Singh

Educational Loans: Grace Period Is Coming to a Close for Class of 2015

Educational Loans: Grace Period Is Coming to a Close for Class of 2015 from Rahul Singh

Educational Loan for International Students

International education is thriving! Every year number of students is increasing for studies abroad However, studying abroad often requires financial help for extra expenses like room charges, boarding, books, travel and other education-related expenses. International education is quite expensive, and everyone cannot afford to fund their International studies. Although there are many scholarships, grants and bursaries for international students but they are highly competitive and rarely cover all of your expenses. But then there is an excellent way to thwart financial hurdle, opt for loans. Educational Loans for International Students can be quite beneficial to overcome these financial troubles.

International Student Loans in USA:

If you are planning your further studies then read following information to seek out financial help:

Getting student loan in USA is quite difficult for international students. Student’s loan can broadly be classified into two categories i.e. federal and private student loan.

Federal loans :

Federal loans are need based and subsidized too but this is not for all. US citizens can apply for federal loans like Stafford loans, Perkins loans, PLUS loans but international students cannot apply for these .

Private student loans :

International students can apply for private loans for which they require a co-signer who must be a US citizen : it can be either their relative or any other person who has an acceptable credit record in America. These loans are obtainable to international students on the same stipulations as US students.

Certain questions you should have in mind and ask the banking official while applying for loan:
Is the loan private or federal?

What is the interest rate?
What are the eligibility requirements?
Do I need a cosigner?
When to start repaying?
Is there anything I need to do to defer payment of past loans while I’m abroad?

International Student Loans in UK : 

If we talk about UK: Eligibility for student loans for international students from the UK government is difficult.

Basically, loans are only available to those international students who have been residing in the UK from last three years prior to the beginning of their course.

If you think you meet this requirement, be sure to read all of the eligibility requirements that are available at UKCISA.( UK council for International Students Affairs)

International Student loan in Australia : 

In Australia many universities provide help to eligible international students through their Student Loan Schemes like the University of Western Australia provides two types of Student loans for International Students:

1.General Purpose Loan: General Purpose Loan  are for necessary expenses linked with studies and directly associated living costs, especially where continuation of studies may be threatened. An international co-signer is required by the students for the loan and the loan should be repaid fully by the end of your current UWA course of study.

Short Term Loan: In case of Short term Loan no guarantor is required. It is available to overcome urgent, unexpected emergencies.

University of Southern Queensland offers Emergency Loans (EL) International studentsfor daily living expenses such as food and medicine.

Financial bodies of almost every country offers educational loans to its citizens, who wish to pursue their studies in their home country or abroad. For example, following is student loan information pertaining to India:

In India all the Public and Private Sector Banks are providing financial assistance to Indian students going abroad. The set limit for the loan amount is Rs.20 lacs. The repayment for the loans starts one year after completion of course or 6 months after getting a job, whichever is earlier.

1. Now a days Education loan proves to be a boon for students who don’t have enough finances to get higher education, but at the same time if students don’t get job, they might experience stress due to the burden of education loan.

Source:http://scholarship-positions.com/blog/educational-loan-for-international-students/201109/

How to get Education loan in India?

With the cost of higher education abroad rising every year, parents have no option but to apply for education loan to enroll their children in a foreign university. There are several misconceptions about student loan offered by banks and financial institutions. Majority of the fears associated with the education loans are far from truth. Getting education loan in India is not complicated as thought to be. The eligibility, payment terms, interest rate, tax rebate and terms of loans are some of the important loan elements that you should focus upon while applying for a student loan. Let’s take a look at some of these important elements of the student loan and know about the procedure to get an education loan in India.

• Eligibility: Only Indian resident aged between 16-35 can apply for a student loan. The applicant must have secured admission to the professional or technical course before applying for the loan.

• Repayment terms: the repayment of education loan in India generally starts six months after taking up a job or one year after completing the professional course whichever is earlier.

• Tax rebate: The Government of India offers tax rebate on the interest you pay on the education loan. The tax rebate is based on Section 80-E of the Income Tax Act 1961.

• Term of loan: the term of the loan is generally 7 years which also includes the period when the borrower is not required to make any repayment.

• Interest rate: the interest rate of education loan is generally in the range of 15%-18%

The above given information is only general. Every bank and financial institution has their own terms and conditions, interest rates and eligibility criteria for the student loan. The maximum loan amount you can get differs with the financial institution offering it. For education loans above 7.5 lacs, you need to present collateral.

To get an education loan, you need to visit the financial institution or bank which offers student loan. You can talk to education loan consultant hired by the financial institution who can give you clear idea about the eligibility criteria and the procedure to apply for the loan. You need to carry your educational documents including the application of the foreign university in which you want to enroll. If you are applying for an education loan above 7.5 lacs, your guardian or the parent has to sign as co-applicant for the education loan.

 The role of the co-applicant in the loan process is that of the primary debtor. The financial institution may also ask for additional security as collateral if you are seeking 100% education loan. The education loan will be only granted after you present University’s fee demand letter.

Some banks and financial institutions have their list of approved educational institutions and professional courses. The loan procedure is simple and more  quick if you are seeking admission in their approved list of educational institutions. So, if you have secured admission in foreign university and looking for an education loan in India then head towards any bank or financial institution that offers education loan for higher studies.

Source : http://avanseeducationloan.blogspot.com/2013/02/how-to-get-education-loan-in-india.html

Decoding your stay in the USA

As any student can vouch for, studying abroad ensures that they get to absorb a life changing cultural experience as well as the chance to enjoy one of the best standards of living internationally. This post aims to elaborate on various study options in the USA.

Once students have applied successfully for courses and completed payment formalities post receiving their i20 visas, they will need to arrange for their accommodation in the US. Contrary to popular belief, the overall costs for tuition and living varies considerably between different universities/colleges, courses and cities that a student chooses. In addition to paying tuition expenses, students will also require financial support for travel, personal computing devices, course literature, and personal expenses.

These expenses may be daunting, but there are a number of support systems in place for students to get financial assistance. It is also possible to get assistance through educational loan with your financial service provider or through securing grants, and scholarships from the university. It is always preferable to start smart with an assessment of the options available for financial assistance. Most students opt for one of the three accommodation options in the United States:

1. On-campus accommodation/ university hall residence: This is a feature that turns out a bit more expensive than other options since students choose to gain accommodation near the school’s classroom, libraries and other facilities. Dormitories allow students to live on the school’s campus and students get to know a lot of students very fast. Quite a few U.S. colleges and universities offer flexible meal-plan programs, and students can choose to pay in advance for breakfast, lunch and dinner by depositing a certain amount of money at the beginning of the semester to buy food from designated places.

Did you know that once students are enrolled for admissions in US academies, the Admissions Department or International Student Office will most likely send them a “pre-departure orientation” packet which also includes options for accommodation in the US.

2. Off-campus accommodation/private housing: In this scenario, students can opt for a private/shared apartment outside of campus, on rent which is usually at a lower price than living on-campus. Before renting an apartment, it is recommended to spend some time in the neighborhood to analyse the safety and convenience of the location. Usually students can save on costs by preparing their own food and sharing.

Did you know that many local landlords will not take responsibility for personal possessions if they get stolen or destroyed so it is recommended that students should buy purchasing appropriate insurance.

3. Host family accommodation/ Home stays: This alternative is only offered by a few universities. It is more expensive compared to living off-campus, but offers students the support of a family, care, comfort and helps them get integrated with American culture quickly. If these are short courses then do consider using alternatives like AirBNB.

Did you know that American rules mandate that most universities will require that parent or legal guardian sign the housing contract as well as the health form allowing medical treatment for students under the age of 18.

A new directive passed by the Obama administration has mandated that students with STEM (Science Technology Engineering Math) degrees can stay on in the US for a total of six years under the Optional Training Program (OPT) – three years after finishing an undergraduate program, and then if need be, another three years after a graduate program. This would give them as much work time in the US as foreign guest workers get under the H1-B program. It’s indeed time to start smart with planning your stay in the US

Source : http://www.avanse.com/blog/decoding-stay-usa/

Education Loan: Tips For Education Loan

Education Loan: Tips For Education Loan from Rahul Singh

Education Loans

Education Loans

Federal Loans

If you're a U.S. citizen or permanent resident, you'll likely be eligible for federal student loans. To determine your eligibility for federal student loans you must complete a Free Application for Federal Student Aid (FAFSA). The FAFSA is available January 1 of each year and has a priority application date of March 15. It is recommended that you have your FAFSA completed at least by June 1. Students who are eligible to complete the FAFSA are US Citizens, Permanent Residents and other eligible non-citizens. Please watch this two minute video for help with the financial aid application process.

Once your FAFSA has been successfully processed, you will be offered the Federal Direct Unsubsidized Loan as well as the Graduate PLUS Loan. Graduate students may borrow a maximum of $20,500 in Federal Direct Unsubsidized loans per year. Upon credit check approval, you may be eligible to borrow the federal Graduate PLUS Loan to cover the remaining costs within your cost of attendance/budget (minus other loans and financial aid).  

Private Education Loans

An alternative loan is also available to choose instead of Graduate PLUS. The amount for the alternative loan is the cost of education minus financial aid awards. The federal government does not regulate alternative loans. As a result, the terms of the loan will vary from lender to lender. When you choose a lender, you will fill out a loan application/promissory note directly with the lender you select and, once approved, you will submit the completed Alternative Loan Lender Form to the Financial Aid Team.

If you choose to pursue a private loan, we recommend applying no sooner than a few months before you start the program. Most private loans are credit-based and the approval decision may expire. Check with your lender about the length of time your application will remain valid before you apply.

Loans for International Students

For an international student, there may be more loan options (and better loan terms) if you have a U.S. citizen or permanent resident co-signer. We are not able to recommend any lenders specifically but we work with all banks and lending institutions. We currently do not have a lender that will offer a loan program to an international Education Loans. Student that cannot obtain a U.S. citizen co-signer or have three years U.S. credit history in his/her own name. We, as the University of Texas at Austin, cannot be your co-signer.

Source : https://educationloansinindia.wordpress.com/2015/11/04/education-loans/

What We're Buying With $1 Trillion in Student Loans

College is expensive and getting more so every year. Since most families don’t have tens of thousands of dollars lying around, the government has responded with ever-more-generous student loan programs.

First there were the loans themselves, with interest subsidized while you’re in school. Then, when that proved inadequate, we instituted income-based repayment, allowing students to cap their payments at a percentage of their discretionary income (stretching out the loan, and getting forgiveness on any balance remaining after 25 years). Then, since that wasn’t quite enough, we made the terms more generous. Now the Obama administration has announced that it’s making 5 million more people eligible for the program.

You know what they say about doing the same thing over and over again and expecting a different result. This is certifiable. College is too expensive, so have the government make it easier to finance -- then keep shifting more and more of the cost burden to the government, without doing anything about the underlying cost inflation that is making it necessary for government to get into the finance business.

Obviously, this can’t go on indefinitely. The income-based-repayment programs are relatively new, so the government hasn’t yet been handed the bill for the loan forgiveness that will be necessary as we give people payment rates that are often less than the interest on the loan. But when the government gets that bill, people are going to notice that this is a costly business.

Over decades, the government has restructured the educational system to make it look more like the health-care system, with the costs paid by third parties while the service is consumed by individuals who have no incentive to think about price. The effects are predictable for both.

There is actually some economic logic to encouraging people to borrow money for school. Education is an investment in human capital, and expensive capital goods are often financed. Doing so makes everyone better off: The lender gets a tidy return, and because the borrowers increase their ability to make money, they can make their interest payments and still be richer than they would have been if they’d painstakingly saved up the money for 10 or 20 years before making the investment.

But this logic gets shakier when you look at our nation’s system of education. If I invest in an advanced piece of industrial equipment to make, say, delicious fried apple pies, I am actually more productive than I would be if I tried to make them with a pot on the stove. This surplus generates the additional income with which to repay the loan. Along the way, the whole economy gets a little bit more productive -- a lot more productive, when you repeat this experience millions of times. That is essentially the history of the last 200 years.

Does college actually make people much more economically productive? Yes, yes, I know: People who go to college earn substantially more than people who don’t, and that earnings premium has been increasing in recent decades. But what, exactly, do they learn in college that makes them so much more productive? In certain technical professions, the answer is obvious; engineers and nurses do need to master the rudiments of their trade before they are unleashed on an unsuspecting public.

But that doesn’t describe the whole higher educational system. It doesn’t even seem to describe the majority of college degrees. Administrators defending the value of degrees in “business” or liberal arts rely on nebulous claims that they are teaching students “how to think.” However, they provide little objective evidence that these programs impart thinking skills worth tens of thousands of dollars.

There’s at least some evidence that a lot of the benefit of a college degree comes not from what you learn in college, but from signaling to employers that you are the kind of conscientious, hardworking student who can get into college and stick with it long enough to get a degree. In other words, much of what we do in school is not learn anything in particular, but obtain a credential that certifies us as good potential employees.

As an individual, it’s still perfectly rational to borrow money to invest in that credential, considering the sizeable income bonuses it confers. But public policy has to look at the system, not just what might benefit a particular individual. And at a system level, helping people borrow money to obtain a credential is crazy. A credential doesn’t increase anyone’s productivity; it just determines the distribution of better-paying jobs. The net economic benefit is zero.

Now, ideally a degree is not just a credential, so the productivity benefits of a diploma are probably greater than zero. But if we could see that much of the economic benefit of college is the credential, rather than the education, would we still pour vast sums of money into higher education?

The payoff from college is not just economic, of course. Regardless of whether the experience or the diploma makes you more productive or raises your income, you ideally left college a better citizen, leading a richer mental life. But let's get back to that public policy question. If someone proposed a program to help people be better citizens leading richer mental lives, you probably wouldn’t be prepared to spend billions of dollars on it, nor would you encourage individuals to take on crippling debt to pay for it.

The federal government now has $1 trillion worth of student loan   in its portfolio, a substantial portion of which will be forgiven entirely or in part. But almost no one even dares to ask what we’re getting for all this money. The economic and social benefits of education are a political given, as axiomatic as mother-love or the speed of light. Periodically, people complain about the cost, and ask whether we’re getting value for our money -- but how can we figure out the answer to that when we’re not even clear on what it is we’re supposed to be getting?

It’s hardly surprising, then, that the only policy we’ve been able to come up with is bigger subsidies. Politicians don’t know much about making people richer, smarter or better citizens. But they’re pretty good at writing checks.

Source:https://educationloansinindia.wordpress.com/2015/11/03/what-were-buying-with-1-trillion-in-student-loans/

7 Essential guidelines to follow as you apply for student loans

Universities around the world continue to raise their tuition fees but that does not deter passionate students from India realizing their dreams by securing admission in one of the universities abroad.

Remember that your study abroad experience is a lifetime investment and for most, taking out a student loan is the only way to make their dream a reality. Most educational loans will cover your tuition fees, board and room fees, health insurance fees, transportation fees, living expenses, books and any other supplies. At the start of each year or semester, the bank will directly send the money to the university account.

Here are 7 essential guidelines to be followed as you apply for a student loan

1. The moment you get the admission letter from the university, apply for a student loan as the processing may take a while. Even before this, research your loan options.

2. Compare interest rates offered by various banks and other loan providers well in advance. Rates vary with different providers and comparing loans will help you identify an entity offering lower interest rates. As a general rule, state run banks offer lower interest student loans as compared to the private banks.

3. Are you eligible for student loan? This is an important first question you must ask yourself. Here again, eligibility criteria varies with different banks. Shortlist banks after you check for eligibility. Find out which are the programmes that are covered by banks. Usually, English language and other short term courses and vocational courses are not covered.

4. In advance, get in touch with a couple or more shortlisted banks and find out about the papers you require in order to apply. Get all the necessary documents and papers ready for the application. Certain universities have tie-ups with certain banks. Find out if the university you have chosen has any such deal as this will make the processing faster. Even as you apply to a university, check out if they are associated with any bank in your country and start the loan application process with that particular bank to make things easier.

5. Most banks or student loan institutions will require a standard set of documents such as –

Identity proof like pan card, passport, driving license, signed verification letter from a recognized public servant or public authority and voter’s identity card. For address proof, you will have to keep any of the below mentioned document ready –

• Telephone bill or electricity bill or water bill

• Voter’s ID

• Aadhar card

• Ration card

• Bank account statement

• Passport

• Government issued allotment letter

6. After you get the student loan, there are certain things you must do. After your student loan is approved, it is time to rejoice. Before you do so, however, you must carefully go through the fine print. Some of the aspects you must check for in the document include pre-payment details, interest structure and an option to extend repayment in case of delay in finding employment. Understand all the listed clauses carefully and have a clear idea about the entire loan process.

7. Last but not the least, if you get a lucrative part time job you can start repaying the interest amount each month to ensure it does not build up to a huge amount. This way, you can greatly reduce the burden.

These are a few essential aspects to understand with clarity before you apply for student loan. For more information and guidance on student loans for Indian students, contact our professional counsellors at overseas consultants. We are here to take you through the entire process, helping you get your necessary documents together and get that loan you desperately need to fulfill your dreams.

Source: (https://educationloansinindia.wordpress.com/2015/11/03/7-essential-guidelines-to-follow-as-you-apply-for-student-loans/)