Kerala HC rescues students by asking to disburse its education loan
Kochi: (KC) Kerala High Court rescues students who couldn’t get an educational loan from banks and observed that their parents’ liability should not be a hindrance for the bank in considering students’ educational loans. The court also leads the bank to disburse the loan for students. 
Justice PB Suresh Kumar issued an order on the petition filed by a second-year BAMS student Devik Soniraj, challenging the Bank of India decision for declining her request for an educational loan. She paid the fee payable for the first year of the course and also a portion of the fee payable for the second year.
Devik Soniraj’s family could not raise the entire balance fee for the course as they had no collateral security to be offered for an educational loan for the entire balance fee. So Devika and her father applied for an educational loan of Rs.7,50,000, for which no security is liable by the bank in terms of its Educational Loan Scheme.
However, the bank denied her loan application, stating that she had not displayed satisfactory evidence, showing that she can pay the deficit fee. Furthermore, the bank added that the stand of the student that her father would meet the deficit fee from his business income could not be accepted, as he has no income from his business.
The court pointed out that the educational loan schemes by banks are to ensure that a worthy student shall not be deprived of an opportunity to pursue higher education merely because they do not have resources.
The guidance notes on the Model Education Loan Scheme from Indian Banks’ Association in 2015 clarifies that the repayment possibilities of an educational loan under such scheme are not to be assessed on the financial position of the parents’ but by the projected future income of the students after education.
