With this new consideration, students will be allowed more time to repay their education loans.

Growing higher education costs has increased the rate at which students are opting for education loans. At present, any student can get a loan up to 4 lakhs without placing any collateral for the loan and can pay it back once he/ she gets a job. But many times students fail to pay back the loan thereby creating a huge pool of bad debts, which has become a reason of concern among the banking fraternity.

The basic idea behind the education loan policy was to help bright students from modest backgrounds achieve their dream goals. But the provision of payment seats in certain educational institutions is being cited as the cause of bad debts, because such students gain admission on the basis of money but do not have the caliber to pay it back.

Measures like increasing the repayment period to 10 years, evaluating student credentials and progress till the time loan is not repaid and asking for collateral against the loan from students especially who plan to take up payment seats or quota seats might be placed in operation soon to streamline the entire loan process and decrease the defaults in the education loan sector.