Parshuram’s Interest-Free Education Loan Program Gaining Effectiveness
Parshuram Municipality, located in the inner Terai of Dadeldhura, has been implementing an “interest-free education loan” program with the objective of ensuring that poor and talented students do not face financial hardships in pursuing higher education. The program has been becoming effective.
The municipality had adopted a policy to provide loans of up to NPR 500,000 by keeping educational certificates as collateral for students who want to study technical and vocational education but face financial difficulties.
Under this program, which started from the last fiscal year, 30 students have taken the loan facility and are currently studying various technical subjects. These 30 students received the first installment in fiscal year 2081/082. Similarly, the municipality has been providing the second installment in the current fiscal year.
With the education loan provided by the municipality, students are currently studying subjects such as MBBS, Engineering, BSc Ag (Agriculture), Nursing, HA, and Computer Engineering in various colleges across the country.
For students’ tuition fees, the municipality has deposited the amount of the first and second installments directly into the campus accounts.
The municipality has also opened new applications for the current fiscal year.
According to Mayor Bharat Badayar Joshi of Parshuram Municipality, talented and underprivileged students residing within the municipal area can receive loans of up to NPR 500,000 to pursue higher education by keeping an SEE or higher-level educational certificate as collateral.
Mayor Joshi said, “There are many examples of excellent students who could not study due to lack of money. Keeping this problem in mind, we brought this loan program. This arrangement has provided significant relief to students from underprivileged, Dalit, women, and endangered communities who have a strong desire to study.”
The 14th municipal assembly of the municipality passed the “Directive on Providing Educational Loans for the Study of Technical and Vocational Education, 2081,” giving the program a legal basis.
Key provisions of the loan
To receive this facility:
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The educational institution where the student studies must be recognized or approved by the Government of Nepal.
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The loan amount will not be deposited into the student’s personal account. Instead, it will be deposited directly into the college or educational institution’s account, reducing the possibility of misuse.
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The loan is interest-free and can be provided up to a maximum of NPR 500,000.
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The municipality stated that the student must be from one of the following groups to receive the loan:
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Indigenous
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Dalit
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Women
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Backward class
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Endangered ethnicities
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Injured
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Persons with disabilities
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Martyr families
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Talented and underprivileged families
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An educational qualification certificate is also mandatory to obtain the loan.
This is a loan, not a grant
The loan provided by the municipality is not a grant but a credit facility. Students must repay the loan after completing their studies.
According to the directive, from the date of taking the final examination of the educational course, the borrower must repay the principal amount as follows:
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25 percent within 1 year
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50 percent within 2 years
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75 percent within 3 years
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100 percent of the principal within 4 years
If the loan is not repaid within the specified time, strict provisions have been made to deprive the borrower and their family members of services and facilities provided by the municipality, including recommendation services, and to recover the amount as government dues.
Application notice and required documents
The municipality has requested applications from new students for the current fiscal year as well. According to the notice published on Mangsir 17, interested and eligible students can submit applications by Poush 17 (if the date falls on a holiday, until the day the office reopens).
For application, the student must obtain a recommendation from the ward office and submit an application to the municipality’s Education, Youth and Sports Section or via email with the following documents:
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Proof of permanent residence
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Transcript of the previously passed level
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Recommendation letter from the college where the student is studying
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Documents showing the fee amount
The municipality stated that the selection process will be based on academic excellence, extreme financial hardship, and interview.
Mayor Joshi said that Parshuram Municipality has been carrying out this work with the belief that local governments should invest not only in roads and physical infrastructure but also in the education sector.
Dadeldhura