Finance corporation to provide loans to educational institutions

A major boost to educational sector is in the offing as the government has proposed to set up a finance corporation to establish educational institutions. Replying to a question in the Rajya Sabha, Human Resource Development Minister Kapil Sibal said that the role of National Education Finance Corporation (NEFC) the government is planning to set up is not only to provide loans for infrastructure development and expansion of institutions but also to refinance loans for students.

The government is still discussing the proposed NEFC with the planning commission. Once it is launched, private, aided and even government educational institutes can take loans on the pattern of soft loans or at the private sector lending rates.

Today, banks are the only source to borrow loans to set up an educational institution. But if NEFC is established it will be a great help for upcoming institutions and also students in that it will facilitate easy loans. Underlining the significance of the finance body, Kapil Sibal said: 

"My ministry is extremely keen on that proposal as presently only 12 children reach college out of 100 enrolled in schools.”

 

While giving details about the role of the proposed body, The HRD Minister made a clarification that conveyed that NEFC would not be responsible for recognition of educational institutes. Granting recognition to them will remain with the University Grants Commission and AICTE.