Coronavirus pandemic has affected different industries and sectors differently. Many people have lost their jobs while the education of students has also taken a pause. In this critical condition, students who have undertaken education loans for abroad studies have been worrying because of the ineffective condition of the economy caused as a result of the pandemic. Students who consider student loan study abroad have however been given certain relaxation by the US government in lieu of the pandemic and have given consideration for their repayments and interest dues as well.

What is Happening with Student Education and Loans During Coronavirus?

Since the outbreak of Covid-19 in December 2019, it has created a large catastrophe across the world and also made a disruptive change on various important sectors in our life like Health, Education, public service, agriculture, food security and so on. If we talk about Education sector, the Covid 19 has resulted in the closure of schools and other educational institutions as well as various challenging experiences happening in every country across the world. Accordingly, students have been worrying about their education loan for abroad immensely as for not being able to cater to interest payments that might affect their education in foreign country. Moreover, with colleges and universities enabling students to study online, students have been worrying about their student loans to study abroad. Education loan for abroad can be considered to have been given certain relaxations as part of coronavirus students relief benefits for their study loan for abroad.

What is happening with Federal Students' loans during Covid -19 outbreak ?

Covid 19 has changed the entire planning and strategy of Students' Loan repayment and refinance. We all know that "an investment of knowledge always pays the best interest." Hence, the U.S Government designed some action plans for students' safety as well as their well being during this difficult time. Taking into consideration student loan study abroad and their financial conditions in these difficult times, the following actions have been taken.

Coronavirus Federal Students' Loan Actions : (since March, 2020)

20 March, 2020 : Secretary of Education directed office of Federal Student aid to :

i) Suspend education loan for abroad studies payments
ii) Stop collections on defaulted education loan for abroad
iii) Set interest rates to 0% for a period of 60 days for student loan study abroad

27 Mach, 2020 : Congress passed, and the President signed into law, the CARES ACT providing for previous relief measures through Sept 30, 2020

8 Aug, 2020 : President Trump directed the secretary of Education to continue to suspend loan payments , stop loan collections and waive interest on federally held students' loans until Dec 31, 2020.

4 Dec, 2020 : Secretary of Education extended Students' Loan moratorium until January 31, 2021

20 Jan, 2021 : President Joe Biden directed the Secretary of Education to extend the pause on interest and principal payments for federally held students' education loan for abroad until at least 30th September, 2021.

6 Aug, 2021 : Department of Education provided a final extension of the pause on students' loan repayment, interest and collections until January 31, 2022.
Borrowers are not required to recertify income for income driven repayment purposes until January, 2022.
Payments and interest for all federally occurred students' Loans resumed on February 1, 2022 and at present the Govt has suspended all federal loan payments and freezed all interest charges through May 1, 2022. At the same time, all collections on federal students' loans have stopped.

Education Loan for abroad and it's related updates in India

In this situation, the regulatory body of all financial institutes RBI released a circular in May, 2020 stating that the borrowers of all kinds of loan including educational will get to avail a moratorium of six months that means from March 1, 2020 to August 3, 2020. This step of RBI can be definitely a matter of relief to students who have been at a loss and unfortunately can not secure a job. Educational loans for abroad studies by the Indian Government can be considered to have made changes through the RBI.

In August 2020, to help individuals and also to decrease the financial stress caused by the Covid19 RBI had allowed restructuring of loans without segregating them as NPAs. During the second wave of Covid19 taken a second resolution for Education loan for abroad studies. According to RBI's recent guidelines in May 2021 the resolution plan for education loan for abroad studies may include conversion of any interest followed into credit facility, rescheduling of payments and granting of the moratorium and timeline is for maximum 2 years. And it is totally based on an individual's income assessment. As the Lenders modified the restructuring of the trend of loans, borrowers of student loan study abroad should have made regular repayment till March 31, 2021. The last date for applying for restructuring of the second loan is September 30, 2021.

Students can consider their education loan for abroad studies from different banks in India that have taken measures as per RBI Guidelines to enable reduced interest rates and EMI facilities. SBI education loan for abroad has ensured to provide students with loans at lower interests and ensure that students are able to avail study loans for abroad. Similarly, even private sector banks including HDFC abroad education loan and Axis Bank abroad education loan can be considered by the students.

It is to be noted that, if a student applies for an Education Loan for abroad studies, then he/she is eligible for tax deduction under Section 80(E) of the Income Tax Act, 1961. This deduction of tax can be claimed on the Interest paid towards the loan.

How can a Student reduce the burden of Educational loan in the midst of Covid-19 Pandemic

1) He/She can go for an educational loan for abroad studies without collateral.
2) The borrower can pay interest during the moratorium. He/she can start the repayment of loan either after his/her study or after his/her earning as part of student loan for study abroad
3) To make educational loans for abroad studies more affordable the Central Government as well as various State Governments offer subsidy schemes. One can go for it as according to latest guidelines as part of the initiative for education loan for abroad studies by Indian Government
4) It should be kept in mind that unsecured education loans are available for up to eight years whereas secured educational loans are available for a period of upto Ten years and more. So just make a fruitful repayment strategy.
5) Sometimes Lenders may offer concessional rates for women, or some special package to those who are studying at various premiere institutions.

"The State of the Global Education Crisis : A path to Recovery'' a report jointly initiated by UNESCO, UNICEF and World Bank stated the harsh reality for education system worldwide due to covid-19 outbreak and also formulated a menu of policy actions, blueprints for recovering and recreating learning and utilizing this disaster to convert our present education system to much more resilient, more unbiased, more reasonable and efficient in delivering learning for all. In the other report "Mission : Recovering Education 2021" where UNESCO, UNICEF and World Bank jointly were forced to provide guidance and relief to countries going through the turmoil. At this point, reopening of educational institutions, students' welfare, level of learning and teaching students as according to their current levels and needs of learning will be important. Here, various learning recovery programs, skill enhancing lessons, socio emotional support and care are essential to bring students back to their learning trajectories. Accordingly, enabling more student benefit ways of student loans for study abroad stare governments of different countries as well as international operations has enabled ways to provide students enhanced levels of education. Study loans for abroad have been made more flexible as well as effective for students thereby ensuring that students are able to carry out their education effectively.