Extend education loan grace period to support the graduates struggling to find jobs #COVID
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The world economy is going through a rough phase. Recruiters around the world have frozen hiring and some have even pulled back the offer letters issued to graduating students. Google, one of the biggest recruiters globally has slowed down on hiring. More than 85 lac fresh graduates of Indian colleges are worried about unemployment as companies in India revoking offers or deferring the joining dates for already recruited candidates.
Approximate outstanding education loans as of November 2019 is Rs 66,902 crore with each loan ranging between 1 lac to 1.5 Cr. All the banks in India require students to start repaying their loans in a maximum of 6-12 months after the study period. Under these circumstances, when there is no surety of a job, how do you expect these students to start paying EMIs of average 75,000 for an abroad education loan or 25,000 for an Indian MBA per month respectively?
If banks do not increase this grace period, the aging parents of these students will be heavily burdened. And in case, they are not able to pay the loan, the credit scores (like CIBIL) of both students and co-applicant (mostly parents) will be badly affected, making them ineligible for any loan in the future.
- Do these students need to go through this?
- Could they have predicted a situation like COVID when they were taking the loan to fulfill their educational aspirations?
- Why do their parents need to bear this financial burden at this age?
I'm Damini Mahajan, Cofounder of WeMakeScholars, filing a petition to RBI and the Department of Higher Education (Ministry of Human Resource Development), for extension of the moratorium period by another 6 months and the interest of this additional period should be waived off.
WeMakeScholars is the leading platform in India for free education loan support which has helped 50,000+ students. WeMakeScholars had always been there to assist students and ease them from the hectic bureaucratic process of banks before giving them the education loan. And WeMakeScholars will stand with these students in this crisis.
Sanjana Donkar, Cardiff University (UK), who has taken 12 lacs loan says- “An extension of the moratorium period will be greatly appreciated. I am already struggling to pay for my rents and food. In a matter of a few months, I need to start repaying my loans, and if the situation hasn't improved by then there is no way, I'd be able to manage. It will be greatly helpful if we could get an extension. The onus of keeping the banking industry running, shouldn't have to be borne by a student who hasn’t started their careers. Where the govt has written off so many loans worth crores, an expectation of extension in the moratorium period is the least we can expect.”
Aravind Sankar, The University of Cincinnati (USA), who has taken 44.25 lacs loan, says- “This surely will be a great step to lower the burden, especially under such a situation. I would say this is a great initiative and feel that this will definitely give us a much more calm and stable state of mind during the job search.”
Sunad Bhat, Arizona State University (USA), who has taken 35 lacs loan, says- “Extending the period would definitely do us good. I am sure within the next year this situation should stabilize and the economy will slowly start recovering. In this situation, I believe that an extended period without interest, will help the students and remove one burden from them at least for a few months.”
Pic Credit: India Today
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