Earlier, a senior official had said that "initially we were planning on the Rs 2.5-lakh income criterion for the student loan subsidy scheme. Both the Planning Commission and the committee of secretaries to whom the scheme had been referred then recommended that the income criterion be fixed in such a way that the scope of the scheme is broadened."

The official added, "Subsequently, a reasonable income criterion was arrived at and fixed. The revised scheme will be brought before the cabinet soon."

As of now, some Rs 14,000 crore is being provided as loans to students annually under the existing higher education loan scheme. However, many poor and meritorious students do not apply for the loan considering the interest and collateral security provisions. The new scheme brings with it the burden of the education loan during the moratorium period.

By definition, the moratorium period is the duration of academic courses during which the student usually does not pay monthly instalments for the loan, but the total interest for this moratorium period gets added to the principal amount once the repayment begins after the student gets employed.

The new scheme has been planned in such a way that it caters to the non-creamy layer of society. Sources inform that the loan facility will be available to those students who will take admission in professional courses offered by recognized institutes, government or private.

Further, the scheme benefits over five lakh students and the interest burden on the government is likely to be Rs 4,000 crore over the entire 11th year plan period.