Inspired from Australia’s student’s loan scheme, the Indian Institute of Technology (IIT) in Delhi has urged the Indian government to draft an income-contingent education loan scheme for the higher education students under which repayment would begin only after the students are employed and their earning goes above a fixed threshold.
This recommendation has been sent to the HRD Ministry which is currently examining it. The suggestion is part of IIT-Delhi’s pitch for more financial autonomy for the country’s 23 premier engineering institutes.
The idea generated after observing students in Australia who, to cover their fees, seek Higher Education Loan Programme (HELP) under which repayment begins after they find employment. The scheme allows students to defer the costs of tuition until their taxable income reaches “a certain level” at which repayments commence.
As per the existing education loan provisions, a student will have to start repayment a year after he/she completes the programme, irrespective of the fact whether employed or not. If a student gets a job soon after completion of his/her programme, repayment will start after six months.