PaRCha – JNU – AISA material – 2006 ID-15831
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SBI has tie-ups with the Indian Institutes of Technology (IITs) and the Indian Institutes of Management (IIMs) and HSBC has tied up with the Indian School of Business. .
Allahabad Bank offers loans at interest rates which are 200 basis points lower than the PLR for students of IIMs, IITs and professional courses. Recently, SBI also tied up with Frankfinn Institute, an air-hostess training academy, for the one-year diploma in aviation, hospitality and travel management. .
For those looking to study abroad, SBI has an interesting package as it has tie-up with Thomas Cook. Thus along with the loan, you can get instant wire transfers, foreign currency drafts, travellers’ cheques, pre-paid card and insurance. .
Earlier, banks insisted that the applicant take an insurance policy. Now it is up to the student. .
The tax angle .
Education loans allow you to reduce tax liability, although the recent Budget has reduced the extent. Under earlier tax laws, students were allowed to deduct up to Rs 40,000 from total income for the year towards servicing of the principal and interest portions of an education loan for eight years from the time of first deduction. Only students, and not parents, are eligible for this tax concession. .
But changes in the tax laws in 2005 have made the tax benefits on education loans less attractive in some respects. Now, a deduction is allowed only on the interest portion of the loan. Though the deduction is not subject to any limits, the repayment of the principal amount will not be taken into account for the tax benefit. .
Financing higher education Law needed on cost-sharing .
M. R. Narayana .
FINANCING of professional higher education (comprising modern and Indian system medicine, and engineering courses) has caught the attention of all stakeholders: Central and State governments, students and parents, private management, and financial institutions. .
The reason is simple. Professional higher education has become unaffordable for poor and meritorious students because of steep increase in fees. This is a negative fallout of judicial decisions on freeing both admission and fee fixation from the controls of the Central and State governments since October 2002. .
Multiplicity of admission tests by governments and consortium of management of private unaided colleges (which do not receive any form of grants-in-aid from a State government) have added both resource and non-resource private costs to students. Frequent changes in the ratio of allotment of seats between the Government and private management have brought uncertainty to assessing the financial requirements by the stakeholders. .
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