How Political Parties will Bring Education loan waiver in Tamilnadu?
Many political parties are claiming that they will waive of the education loan for students in Tamil Nadu. There are lot of challenges the Government will face if it decides to waive off education loan. Approximately, 90-95% of education loan are in Non performing asset (NPA)category. Actually, no state government is allowed to give instructions to any Public sector bank (PSB). It is possible if the government buys the loan from bank and then it can declare its people that education loan is cancelled. Data as of 31st March, 2015 shows that in Tamil Nadu there are 9.56 lakh students who have got an advance for education. The total outstanding education loan is Rs.16, 482 crore, out of which Rs.15,700 crore was disbursed by PSU banks (Reference from Quora)
Problems in Education Loan cancellation
Okay, let us discuss some real problem now. Many PSB’s has sold their education loans to private companies. For an example you can checkout the below image. (Private information are removed)
A friend of mine has got an education loan from State Bank of India. Now the bank has sold that loan to M/s Reliance Asset Reconstruction Company through assignment agreement.
On sale of education loan, the private company has become the legal lender and retains all the rights of the loan. So my friend needs to pay his EMI/Full loan repayment to the private company. He tried contacting the Assets Reconstruction Company through phone to discuss about repaying the education loan. However there is no response from their end. This delay in responding to queries will further increase the burden in repaying the loan. Now, in this case how the parties will react. See their smart move, banks are more smarter than the political conditions of Tamil Nadu. They did this before a month itself. Some people may repaid their loan fully or partially, so if the education loan is cancelled then there is an another doubt that whether they will get any benefits.
I believe that, there may be more problems in bringing education loan waiver in Tamil Nadu.
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