Educational loans - alternative way to pay for education

«Education is the value of each state. Educated  people  are  the basis of any country»

The  head  of  the state  in his annual  Address  to the people of  Kazakhstan marks the necessity of  getting education, orders  programs development to promote educational level rise of  the youth of Kazakhstan.

One of such programs is the introduction of system of warranting of educational credits, thanks to which high school graduates, students have possibility to receive the loan from commercial banks to pay tuition fees. Such loans are guaranteed by the government in the name of the  JSC “Financial Center”, which is the subordinate organization of  Ministry  of  Education and Science of the Republic of Kazakhstan (Financial Center).

As it is known, in Republic of  Kazakhstan educational loans have been offered by commercial banks for a long time  but  we will try to clear a difference between the  unguaranteed and guaranteed educational loans offered by banks.

So, what are the basic differences between educational loans guaranteed by the government and  usual  household or unsecured  loans?  First, the interest rate and loan term; loans, guaranteed by the government are given under more accessible conditions. Secondly, pledge is required only in individual cases. However, for receiving loan, guaranteed by the Financial Center  it is necessary to have  one  or two guarantors (any individuals –citizens of Kazakhstan).

The loan amount is not limited but it should not exceed  the fee  throughout the entire period of study. Provided that, solvency of guarantor, in other words income from primary employment  is taken into consideration. It is necessary to add that there is gestation period, i.e  the period of study and 6 months after graduation when loan deferment is available. Early repayment of loan is done without penalties.

The coverage of program is wide, the above said bank – partners  work  in all regions of Kazakhstan. Credit – granting mechanism is the same: Borrower applies to the Bank, gets advice, collects necessary documents to register   and  submits them to the bank.

Nowadays, a student can plan own future and decide where to enter and which  specialty  to choose. Hopefully, the period assigned for the employment and

fixed  loan amortization will be stimulus for students to study well and search for employment possibilities more actively and become life trial to contribute to student’s better destiny.

Receiving a loan as the source of funding education enables to plan family budget more efficiently so that the family don’t have to search large amount of money within a short period of time to pay for education and change the fixed expenses order.

It   is necessary to say that such student Finance  Programs are available and function successfully in lots of developed countries. We would like to hope that the Program will get more positive responses and develop for the better in our country as well.  

Consequently, our state, keeping main human potential of the country, actively provides conditions for the youth to have successful future but not to hope for the destiny Our government wants to see its successors as successful, modern and competitive professionals.

Reference:

JSC "Financial centre" has been created according to the governmental order of Republic Kazakhstan of o June, 1, 2005 № 541 by the transformation of government  institution “Financial centre” of  Ministry of Education and Science  of the Republic Kazakhstan

The basic object of activity of  JSC "Financial centre" is the issue of educational loans guarantee, provided by financial organizations in money form and implies return of previously taken governmental educational and student loans.

Finance Centre
Educational loans conditions