The students are back from Ukraine; what happens to their student loans?

Nearly 1,400 students have an outstanding balance of Rs 133 crore, Center says; they may be eligible for a two-year moratorium

Banks sanction education loans taking into account their respective board-approved lending policies, RBI instructions and the model education loan scheme formulated by the IBA. Photo: iStock

After Russia invaded Ukraine in February, more than 18,000 Indian medical students studying in Ukraine were evacuated from the war-torn country and brought home. It’s been more than five months, and as the Russian-Ukrainian war continues to rage, these Indian medical students face an uncertain future.

There is little clarity on how they will complete their education as the Indian Medical Council is yet to make a decision on this. The students have asked the Center for help in getting them into colleges here, but there are too many procedural issues involved.

Read also : No plan to take Ukrainian medical students to local colleges: Center

Meanwhile, their student loans continue to be in limbo. Most of these students come from middle-class families who have taken out bank loans to travel to Ukraine to pursue medical studies.

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Lok Sabha Request

Highlighting this point at the Lok Sabha last week, Chandra Sekhar Sahu (BJD), Girish Bhalchandra Bapat (BJP), Pritam Gopinath Munde (BJP) and Rahul Ramesh Shewale (Shiv Sena) inquired whether a large number of students have benefited from education ready to study in Ukraine. They also asked for details of the outstanding balance.

In a written response, the Minister of State (MoS) of the Union Ministry of Finance said that 1,387 students had been granted education loans to study in Ukraine with an outstanding balance of Rs 133.38 crore.

MPs further inquired whether the Center had “requested the Association of Indian Banks (IBA) to assess the impact of the dispute on these outstanding education loans of repatriated students; and, if so, details thereof and how the government proposes to protect them from the defaulter list.

Read also : Why did Indian students stay in Ukraine? Voice of affected people

The Ministry of Finance’s MoS said the Center had asked the IBA to assess the impact of the Ukrainian conflict on the ongoing study loans of repatriated students and “to engage in consultations with stakeholders”. This would usually mean that the respective bank employees and recipients (students/parents) discuss the best way to handle the loans.

Two-year respite

The MoS went on to point out that banks sanction education loans taking into account their respective board-approved lending policies, RBI instructions and the model education loan scheme formulated by the IBA. . “The model program provides that if a student is unable to complete the course within the scheduled time due to reasons beyond his or her control, the lender may authorize such extension, not exceeding two years, as may be deemed necessary to complete the course.”

According to the IBA, banks are “inclined to grant an extended standstill period in accordance with the terms of the loan agreement/educational program under which the loan was sanctioned”.

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