Govt offers interest-free loans to students from poor families Bangalore, Feb 3, 2014, DHNS: DH illustration. For representation only. Students from the economically weaker sections pursuing general degree courses in the State can now avail interest-free educational loans. The State government has decided to implement the Rajiv Gandhi Loan Scholarship Scheme for students in general degree and postgraduate degree courses from the academic year 2013-14. This will be valid for colleges run by the State government, universities and aided colleges (for aided courses only). This does not include professional courses. Students whose annual family income does not exceed Rs 2.5 lakh will be eligible for the loan. The student should have secured 50 per cent or more marks in PUC or any equivalent course. Announcing this here on Monday, Higher Education Minister R V Deshpande said the government would offer full interest subsidy for the period of study of the course. Beyond that period, students will be responsible for payment of monthly instalments towards both principal and interest repayment. The loan will be given towards tuition fee and other fees, food and accommodation, books, computers among others. The loan cap is Rs 1.8 lakh for degree courses (three years), Rs 3 lakh for integrated courses (five years) and Rs 20,000 for short-term courses (less than six months). A press release issued by the Higher Education Department indicates the current rate of interest charged by banks for student loans at 12 per cent for up to Rs 4 lakh. The same will be available for girl students is at 11 per cent. How to avail loan? Students can avail the interest subsidy only once. They can opt for it either for the first undergraduate course or the postgraduate course. If they discontinue in between, or are suspended, the interest subsidy will be discontinued. The scheme will be implemented through Vijaya Bank, the nodal bank for the State-level Bankersâ€™ Committee. Those interested in availing the loan will have to submit their Aadhaar numbers. The loan would be tagged to their Aadhaar number and their PAN numbers. To help the employers identify the beneficiaries, there will be electronic tags. Where neither Aadhaar nor PAN numbers are available, banks will evolve their own mechanism for monitoring loan repayment, according to the minister. Deshpande said this was an initiative towards increasing enrolment in higher education. The Stateâ€™s Gross Enrolment Ratio in higher education for 2010-11 is 25.5 per cent. The government aims to increase this to 35 per cent by 2020.