Budget 2024: Loan up to Rs 10 lakh for students' higher education, says FM

Union Budget 2024: Finance Minister Nirmala Sitharaman has allocated Rs 1.48 trillion for education, employment, and skilling initiatives

Union Budget 2024: Finance Minister Nirmala Sitharaman, during the Union Budget 2024 presentation on Tuesday, announced a revision to the model skill loan scheme. The revised scheme will now facilitate loans up to Rs 7.5 lakh, backed by a guarantee from a government-promoted fund. This initiative is expected to benefit 25,000 students annually.

Budget 2024: Higher education loans for underprivileged students

Additionally, students who do not qualify for existing schemes will be eligible for loans up to Rs 10 lakh for higher education at domestic institutions. Sitharaman said, "E-vouchers for loans up to Rs 10 lakh for higher education in domestic institutions will be given directly to 100,000 students every year, with an annual interest subvention of 3% of the loan amount."

Budget allocation for Education, Employment, and Skilling

In the Budget for FY25, the finance minister allocated Rs 1.48 trillion for education, employment, and skilling initiatives. This allocation represents a significant increase compared to the Interim Budget presented before the Lok Sabha elections, where the Ministry received an overall allocation of Rs 1.2 trillion, which was 7% less than the revised estimate for FY24.

Moin Ladha, Partner at Khaitan & Co., commented on the Budget 2024-2025 announcements, stating, "These schemes align with the government's broader initiatives to make India 'aatmanirbhar', like the Make in Bharat campaign and the establishment of GIFT City to attract investments. This approach will not only curtail foreign exchange spending but also create significant opportunities for students in growth, employment, and entrepreneurial ventures."

What is the Skill Loan Scheme?

The Skill Loan Scheme provides financial assistance to students pursuing technical courses offered by training institutes, polytechnics, and similar institutions.

How the Skill Loan Scheme works

This programme is available through banks that are members of the Indian Banks' Association (IBA) and other financial organisations approved by the Reserve Bank of India (RBI).

Eligibility criteria for the Skill Loan Scheme

To be eligible for the Skill Loan Scheme, individuals must have secured admission to a course conducted by one of the following institutions:

* Industrial Training Institutes (ITIs)

* Polytechnics

* Schools recognised by the State or Central Board of Education

* Colleges affiliated with a recognised university

* Training partners affiliated with the Sector Skill Councils, National Skill Development Corporation (NSDC), State Skill Mission, or State Skill Corporation