I live in India. One of my cousins is suffering from an autism spectrum with a learning disability. During the hard times of COVID-19, his parent’s income was reduced due to which they were unable to pay his academic fees. As a result, someone give suggestion to them for taking a student loan for their child with a disability.

Of course, there are many questions in everyone’s mind while or after taking a loan. From where can we take a student loan for a person with a disability? What can we do to avoid student loan debt? How would I pay for mortgage, groceries, electronics, utilities, medical bills plus repay the student loan? In fact the loan is tough enough to repay while working but while out of work due to illness or injury! It’s Brutal. 

On the contrary get disability income insurance with an option for student loan coverage. But Disability can and does happen in one in 4 persons. I am writing to help people by making their search easy, to know about the complete information regarding student loans for people with disabilities. The charge rate of interest on this loan cannot exceed 4%.

Are There Any Special Loans For A Person With A Disability?

 The major mission behind this loan disbursement scheme is to assist students with disabilities by providing concessional loans for overall empowerment and upgrading skills. Moreover, people with disabilities face different types of barriers such as mobility challenges, psychological, financial, etc. while pursuing their studies and living life with dignity. Accordingly, they remain deprived of enhancing their talent or skills. They also miss the opportunity to get a dignified place in society. 

For instance, the student loan is a financial help provided by the government, at a lower interest rate for studying in India or in Abroad where admission has been secured. In this case, the interest for males is 4% and for females 3.5%. If you are going to apply for a loan 

in India, you can get a student loan of up to 10 Lakhs. 

For  Abroad, you can get a student loan of up to 20 Lakhs.

Different types of Student Loans for a person  with disability

• Divyangjan Swavalamban Yojana Scheme for Persons with Disabilities. …
• NHFDC Scheme for Concessional Education Loans for Persons with Disabilities.
• Central government schemes for differently-abled.

From Where Can I Take A Student Loan For Disability?

Any kind of loan for people with disabilities is taken by NHFDC(National Handicapped Finance and Development Corporation) through the State Channelising agencies, Non-Governmental Organisations, Nationalised Banks, and Regional Rural Banks. SCA’s sanctions loans below 10 Lakh, While Loans above 10 Lakhs are sanctioned by NHFDC. However, Loans are extended by NHFDC through Nationalised Banks and Rural Banks.

Furthermore, there is a microfinancing scheme for low-income borrowers in NHFDC in which NGOs will approach the respective State Channelising Agencies. In the same way, the applications are also submitted by NGOs with all the necessary details and documents of the borrower. 

National Banks that provides disability  loans are:

• Punjab National Bank
• Andhra Bank
• IDBI Bank 
• Rural Banks in Haryana, Gujarat, Uttar Pradesh, and Uttranchal. 

How To Apply For A Student Loan For A Person With A Disability?

You can apply for a loan via online mode on the NHFDC website www.nhfdc.nic.in just a few simple steps;

                                                                                           OR

In contrast, the applicant can submit their application with requisite documents for financial assistance from NHFDC through the implementing agencies. Even so, If you are living in the states namely Assam, Uttarakhand, Uttar Pradesh, Madhya Pradesh, Haryana, Maharashtra, and Gujarat, you may contact the nearest branch of RRB for a concessional student loan. 

Eligibility Criteria For Student Loan For A Person With A Disability

• Any citizen of India with 40% or more disability can borrow a loan. 
• Age criteria for educational loans are not required. 
• The government-authorized resident proof is required for obtaining a student loan.  
• There are no economic criteria required for obtaining a student loan from the NHFDC scheme.

Rate of interest for student Loan

On Education loans, the rate of interest is 4% for male students and 3.5% for female students up to 20 Lakh. 

On the other loans under NHFDC

If you take a loan of 0-50k, the interest rate would be 4-5%

             For a loan of 50k-5 Lakhs, the interest rate would be 6%

                       loan of 5-15 Lakhs, 7%

                           For  15-30 Lakhs, 8%

Note: For women with disabilities except for OH (Orthopedically Handicapped), there would be a rebate of 0.5% in interest in student loans up to 50K for encouraging higher studies.

Repayment of Student Loan 

There is a timeline of 7 years for the repayment from the date of loan disbursement. Meanwhile, The borrower can also prepay the loan at any time without giving any prepayment charges.  Moreover, No pre-closure charges shall be asked/insisted from the borrower in case of early repayment of the loan.

Income-driven repayment plan

It is for Federal Student loans only. If your payment is low it can be as low as zero. Moreover, if you are unemployed or not able to work regular hours. Hence, the income-driven repayment plan could be really helpful to keep the payment proportionate. 

Student Loan Forgiveness – Can My Student Loan Be Forgiven?

When a borrower takes the student loan, they’re aware they will have to pay it back in the given time period. Suddenly, if you become ill or completely disabled leads to loan forgiveness. Furthermore, there are some eligibility criteria for Loan Forgiveness such as if you become total or permanently disabled. In addition, there is a loan discharge scheme known as total or permanent disability discharge (TPD). Above all to avail of this facility, you will have to demonstrate that you are permanently or completely disabled.

 It takes 30 days to review your documents, contact your loan servicer, who is holding your loans, and pause payments for a period of time(120 days). We have to submit the complete application within the time of 120 days. 

If your application is approved, you will be subject to 3 years review period that starts on the date when discharge is finalized and approved. If you have got approval because of a veteran affair document, you are not going to be under review for three years of period.

Note: The discharge of the loan could be revoked if no such proof is found within the time of 5 to 7 years window. 

What Happens To Student Loan If The Borrower Dies, Becomes Disabled, or In Case Of Severe Injury?

In certain types of unfortunate circumstances, you don’t have to repay the rest of the loan amount. On repayment discharge or forgiveness approval, you receive a 1099-C form (cancellation of debt) due to some sort of unfortunate event like this. Likewise, the permanent disability is a little bit unclear so the service providers do a regular review. In the same way, If you are not able to work for earning you do not have to worry about the giant monthly payments for your student debt.

In a Word

The government is continually working for the people with disabilities who want to achieve something, for their overall empowerment and up-gradation of skills. Moreover, NHFDC channelizes finances through the state channelizing agencies(SGA). Besides financial assistance in the form of an educational loan, NHFDC also provides scholarships to a person with a disability. In fact, a total of 1500 scholarships are available each year for students with disabilities. There are two Scholarships schemes available;

1. Trust Fund       – 50,000 /-  per year on average is available for 1000 students.
2. National Fund  – 12,000 /- per year on an average are available for 500 students

Under this scholarship scheme reimbursement of the total course fee, books expense, out-of-pocket allowance, expenses on aids, and hostel fee are considered. 

Any student can apply on the website of NHFDC. Afterward, the scholarship will be awarded to one student for one course at a time after its completion can avail for a scholarship for another course. Moreover, Students pursuing higher education or even through correspondence are also eligible for this scholarship.

I request all the institutions and colleges. To inform the benefits of the above schemes to the students with disabilities and also place this education loan plus scholarship information on your websites for the guidance of all the students with disabilities. Generally, for the students who want to achieve their goals by completing their higher education.