According to data shared by 21 private sector banks, Ukraine-returned Indian students owe an outstanding balance of INR 121.61 crore against education loans, as of December 31, 2021.
While replying to a question in the Lok Sabha on April 4, 2022, Finance Minister Nirmala Sitharaman highlighted that at least 1,319 Indian students among around 22,500 Indian nationals have returned from Ukraine.
When asked how the government was planning to waive off loans of these students, it said that the impact of the ongoing conflict is being assessed and steps would be taken accordingly after the situation gets better.
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The minister has further requested the Indian Banks’ Association to evaluate how the Ukraine-Russia war has affected the outstanding education loans of the students.
The central government notified that it has provided all kinds of support including shelter, medical assistance and food to all the displaced Indians who had to flee to the western neighbours of Ukraine. Eventually, they were evacuated by the Indian government under Operation Ganga.
The Minister also stated that the “welfare of all Indians students abroad” was a top priority for the Union Government.
Unlike life insurance policies, student loan agreements do not usually provide relief in times of war. However, banks often call for negotiations with the borrower and look for ways to restructure the loan and extend the tenure or provide a longer loan moratorium. The same may, nevertheless, differ from one case to the next.
Costs such as credit score hit, penalty or forfeiture of collateral would be counted if the borrower fails to repay the loan.
Students would, therefore, have to repay their loans unless the government or banks offer a debt relief program.
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Given that Ukraine offers low-cost MBBS education, students would not have taken a higher loan amount. It is expected that students would be able to start repaying once they complete their education.
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Source: Business Today
