As the fund for the Concessional Education Loan Scheme almost runs out within the first year of its launch, the government is exploring additional funding. The Office of Cabinet Affairs and Strategic Coordination (OCASC) confirmed this with the BBS on Friday. Initiated under the Economic Stimulus Programme, the scheme is planned to run until 2028.
The ESP Concessional Education Loan was launched in July last year, promising three years of affordable financing for economically disadvantaged students. Less than 12 months in, it is under strain.
Of the Nu 600 M allocated for the scheme, around Nu 431 M has already been disbursed. Through two intakes, it covered more than 560 students. Today, only about Nu 169 M remains. And if the applications for the third intake are any indication, the demand is not slowing down.
Earlier this week, the third intake opened and closed on the same day. The Bank of Bhutan cited an overwhelming response and exhaustion of available funds under the current allocation as the reasons. The application period was originally scheduled to remain open until the end of this month. According to the Office of Cabinet Affairs and Strategic Coordination, the bank received 253 applications on the opening day.
The government stepped in after the sudden closure drew public outcry, with students and parents venting frustrations on the bank’s social media pages. The application window reopened on Thursday evening, and the bank is now expected to receive more applications.
While the government assured additional funding, how much and when is yet to be confirmed. The Cabinet Office says such details will be worked out after 30th June, once the bank finalises how much of the remaining fund has actually been approved and sanctioned.
As per an earlier BBS report, the average loan disbursed under the scheme so far stands at around Nu 800,000 per student. It comes with an annual interest rate of 4 per cent, and students will have 10 years to repay the loan. The scheme was designed specifically for students from families earning under Nu 500,000.
Devika Pradhan, BBS News
