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.
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.