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Let us look at Financial Aid
Type of loan

Let us look at Financial Aid from a different perspective, dividing it into two categories

Sources in India
• Bank Loans
• Education Trusts & Endowments
• Fellowships

Sources in Other Countries
• University Funding/Scholarships
• Loans from Banks

Sources in India
• Bank Loans

The most feasible and widely followed source of Financial Aid in India is through loans from banks. In our country banks are still the most trusted source one depends on; thus for an education abroad, your parents would always consider bank loans as the first option. With changing times more and more banks offer students’ loans extending from education to research. Loans are offered under certain terms and conditions and definitely under a set scheme of interest.

If it’s a bank loan you want, then there are a few conditions that you should meet:
1. Your admission to a foreign University should be confirmed.
2. Loans are not offered for correspondence courses.
3. The bank will consider your past academic record and offer the loan only if they find it satisfactory.

Once you fulfil these conditions you will be eligible for an educational loan that will cover course fees, hostel fees, cost of books, equipment and also one way fare to the place of study.

Usually the done principle followed by banks is that they offer just partial loan. This means that at least 25 per cent of the total course expenditure is to be paid by the parents of the student. For loans that are of huge amounts, you may have to provide security in the form of a house mortgage, NSE shares or insurance policy. The repayment of the loan would probably start six months after the completion of the course. But if you get a job immediately after completing your course then you would start repayment one-month after getting the job. Although the maximum time given for the repayment is 15 years counted from the date of the first disbursement yet here also certain conditions may come into force.

All the above conditions apply generally but each bank would follow its own schemes thus it is advisable to first study and research all sources and then decide upon the most viable one!

India now boasts of a long list of banks that offer loans but here is a list of three bank schemes in detail:
• State Bank of India: Gyan Jyoti Scheme
The State Bank of India offers financial assistance to the deserving students who aspire for higher, technical / professional, studies like medical, MBA courses et cetera in India/abroad.

Coverage
• Meets tuition fee and other fee expenses.
• Maintenance the cost of books and equipment.

Eligibility
• A First division (Second Division for SC/ST) or Passing the entrance test for the technical/professional course and securing an admission for the course.
• Parents/guardian having independent regular source of income, including self-employed/ professionals and those engaged in agriculture and allied activities with sufficient income.

Type of loan – Term Loan

Amount of Loan
90 per cent of the cost of the total course; this is subject to a maximum of INR.8 lakhs.

Borrower
Student and parent/guardian, jointly; here employed students can also apply for the loan.
Margin – 10 per cent

Interest (w. e. f. 1.3.99)
• Up to INR. 25,000 – 12. 21 per cent
• Above INR .25, 000 up to INR. 2 lakhs – 12. 21 per cent
• Above INR 2 lakhs – 14. 28 per cent

Repayment
The loan will be repaid in a maximum period of 60 months after the completion of course or securing a job, whichever is earlier. A moratorium period for one year may also be given, if considered necessary.

Security
• Collateral security from the borrower /guarantors good for the amount involved.
• Pledge/mortgage of immovable property.
• Wherever tie-up arrangement is established an irrevocable letter of authority from the employee concerned and a letter of undertaking from their employers are to be obtained.

Formalities Required
• Application from (Student and parent/guardian).
• Proposal by the Branch.
• Term Loan agreement (student and parent/guardian).
• Guarantee Agreement.
• Pledge of security/Equitable mortgage of immovable property, where applicable.
• Deed of Ratification to be executed by minors on attaining majority (where applicable).

Authorised Branches:
All branches that have Personal Banking Division and those serving universities/colleges
• Cent Vidyarthi Finance for Education (www.centralbank.com)

Coverage
The scheme covers studies expenses in India and studies abroad. The financial assistance will cover admission and tuition fees, books and stationery, equipment/ instruments, examination fees, hostel/mess charges and travel expenses in case of overseas courses.

Eligibility
• Students, who have secured admission to any of the general / professional courses including computer and job oriented courses recognised by the Government/Universities, are eligible for education loan to study in India or abroad.
• This scheme does not cover correspondence courses.
• The student should be between 16 and 28 years. However, the age is relaxable for SC/ST students by two years.
• The student should have a good and consistent academic record in previous examinations. In the case of SC/ST, a second class would be sufficient

Type of Loan
• Students taking postgraduate courses in Science, Technology, Medicine, Engineering Architecture and full-time Management Course in M.B.A. and M.M.S. at recognised universities abroad, including law and accountancy are eligible. The course should lead to a Masters Degree or a postgraduate diploma.

Amount of Loan
• Up to INR. 3 lakhs for higher studies in India, for the entire duration of the study.
• Up to INR. 5.00 lakhs for higher studies abroad.

Margin
• For up to INR. 1.00 lakhs – 15 per cent.
• For up to INR. 5.00 lakhs – 25 per cent.
• In case of SC/ST this margin can be relaxed on loans up to INR. 50, 000.

Rate of Interest
• Up to INR. 25,000 – 12.50 per cent.
• Between INR. 25,000 and INR. 2.00 lakhs – 14.00 per cent.
• Above INR. 2.00 lakhs @ PLR (those whose family income does not exceed INR. 12,000 p.a. and fall under the DRI scheme, the interest rate is 4.00 per cent.

Repayment
1 per cent rebate is granted in the rate of interest for regular repayment of interest and instalment and payment of insurance premiums.
• Federal Bank Scheme (www.federal-bank.com)

The purpose of the loan is to make available financial assistance to the needy and deserving students of bright academic record so as to enable them to continue higher studies in India or Abroad either in diploma/graduation or post-graduation level in Arts, Science, Commerce, Management, Medicine and Engineering.

Eligibility
Under the scheme the loan can be sanctioned to a student of Indian nationality who intends to join an approved course in an educational institution recognised by the government, or a University in India or abroad.

Courses Approved
A – Category:- Academic courses such as Diploma, undergraduate/postgraduate courses in Arts, Science and Commerce etc.
B – Category:- Professional courses such as Diploma, undergraduate/postgraduate courses in Engineering, Medicine, Dental Science, Agricultural Science, Veterinary Science, Computer Science, Nursing, Pharmacy, Business administration, Law etc.,

Type of Loan
The loan account will be deemed a term loan. To facilitate flexibility in operation, future debits on account of recurring expenses in each semester/year can be made to this account.

Margin
The margin is NIL for courses in India. For foreign studies a minimum margin of 10% is necessary.

Loan Amount
• In India between INR 0.50 lakhs and INR 5 lakhs
• Abroad between INR 2 lakhs and INR 10 lakhs

Interest
• Up to and including INR.2 lakhs PLR + IT
• Above INR.2 lakhs and up to and including INR.5 lakhs PLR + 1 + IT
• Above INR.5 lakhs and up to and including INR.10 lakhs PLR + 2 +IT

Repayment
The repayment should begin within 12 months after the completion of the course, or after the student gets a job, whichever is earlier.
• Maximum period for course completion: 6 years
• Maximum period for repayment after course completion: 5 Years
• Hence maximum period of the loan: 11 Years
• Minimum period: 3 Years
For details e-mail at hoffice@federal-bank.com OR any of the branches having e-mail.
• Education Trusts & Endowments

Education Trusts and Endowments are offered by Indian private firms and agencies that work towards providing loans to Indian students applying abroad. Usually the loans from these trusts have comparatively lower rates of interest, as low as 2 to 4 per cent or they maybe interest free. Here is a list of the most well known trusts. This however does not mean that the Education Trusts are just limited to these organisations; more research may bring forward an option that may be apt for you!

1. J.N. Tata Endowment:
Low-Interest loans of INR. 50, 000 to INR 2 lakhs, and grant of INR. 25, 000 to INR. 50, 000, for several disciplines. Completed application forms must reach by 25th February of the year of award.

For more details and application form, write to:
The Director,
J.N. Tata Endowment,
Bombay House,
24 Homi ModyStreet,
Mumbai-400001

2. K.C. Mahindra Education Trust:
Up to INR 65, 000, for postgraduate studies in various disciplines. Forms must be requested before 28th February of the year of award and completed forms must reach by 31st March of the year of award.
For more details and application form, write to:
The Managing Trustee,
K.C. Mahindra Education Trust,
Cecil Court,
Mahakavi Bhushan Marg,
Mumbai-400039

3. Mariwala Trust:
Up to INR 50, 000 interest free, for postgraduate studies in several disciplines. Application forms must be requested before the 1st March of the year of award and completed forms must reach by 30th April of the year of award.
For more details and application form, write to:
The Managing Trustee,
Mariwala CharityTrust,
409 Shah and Nahar Industrial Estate,
Dr. E. Moses Road, Worli Naka,
Mumbai-400018
Tel: (022) 4938307 Fax: (022) 4974704

4. R.D. Sethna Scholarship Fund:
An amount of INR 20, 000 to INR 50, 000 at 2 per cent annual interest for undergraduate and postgraduate studies in science, technology, commerce and education. Completed application forms must reach by 31st May of the year of award.
For more details and application form, write to:
The Chief Executive
R.D. Sethna Scholarship Fund,
Esplanade House,
29 Hazarimal Somani Marg, Fort,
Mumbai-400001

5. Sahu Jain Trust:
The trust offers loan scholarships for higher studies in India as well as abroad.
For more details, write to:
The Secretary
Sahu Jain Trust,
4th Floor, Times House 7,
Bahadur Shah Zafar Marg,
New Delhi -110002

• Fellowships
Fellowships are very popular, and securing one is a very difficult because of the serious competition. A few important ones are listed here:

1. Aga Khan Foundation:
This fellowship is available for development studies and courses not available in India. Forms are issued from January each year and completed forms must reach by 31st March of the year of award.
For more details and application form, write to:
Aga Khan Foundation,
Sarojini House, 2nd floor,
6 Bhagwan Dass Road,
New Delhi -110001

2. Inlaks Scholarships:
This fellowship is available for several disciplines. Applicants must be graduates, and 19-30 years old. Completed application forms must reach by 30th August for the following year.
For more details and application form, send a self addressed envelope to:
Inlaks Foundation,
PO Box 2108,
Delhi-110007

3. AT&T Leadership Awards (For U.S. only):
U.S. $ 5, 000 awards for the students from the Asia-Pacific region going to the U.S. for study in any discipline. Six of the 36 awards went to Indians in 1998. Applications must reach the programme’s Malaysia office by 15th September. Decisions are announced by 31st December.
For more details and application form, write to USEFI or email awards@attmail.com or fax at (886) 2-2715-7013 (attn: AT&T Leadership Award)

4. Rotary Ambassadorial Scholarships:
The scholarship amount goes up to U.S. $ 23,000 for studies in any subject and any country.
For any information, contact any Rotary Club office or write to:
The Scholarships Programme,
Rotary Foundation,
Rotary International, One Rotary Centre,
1560 Sherman Avenue,
Evanston, Illinois, U.S.A.

Sources in Other Countries
• University Funding/Scholarships
As said earlier, scholarship for US universities are offered to international students applying abroad but that too is limited, also the criteria for eligibility is merit, also for MBA programs some universities may have some special questions that you would have to answer.

But even if you are awarded a scholarship, very rarely does it cover the total cost of your education. However there is no harm trying!
The good news is that in a bid to attract more and more international students, other countries are now on their way to planning and opening up channels wherein they would also offer scholarships to international students.

But it would be recommended that you research comprehensively regarding the University you want to apply to and find out if it offers scholarships!

• Loans from Banks
Here is a list of Foreign Banks (US-based banks) that may offer student loans to international students:
• International Education Finance Corporation (IEFC)
• Sallie Mae
• Access Bank
• Bank of America
• Guaranteed Access to Education Loan Program (GATE)
• Global Student Loan Corporation (GSLC)

Very few banks give educational loans to international students without a co-signer. This happens only if the banks have an understanding with the University the student has been admitted to. Needless to say, that these universities are the best of universities and high in rankings.

All said and done, there may still be some financial aid option waiting for you round the corner that we are unaware of, so once you decide you need financial assistance, research, research and research and finally get it!
Note: The information regarding Bank loans, Trusts and Endowments is courtesy

Note: The information regarding Bank loans, Trusts and Endowments is courtesy www.academics-india.com