Azerbaijan may issue education loans for students

The parliamentary committee on economic policy recommended the bill on "Education loans" to be considered by the Azerbaijani Parliament after the meeting on Thursday. "Every second of three students in Azerbaijan gets paid education," MP Ali Masimli said at a meeting. "The average cost of education is 2,000-2,500 manat per year. Not all students are able to cope with this financial burden. There is a need to adopt this law."

According to the bill, the loans will be given to finance education in higher and secondary special educational institutions. It was stressed that these loans may be given to pupils of secondary schools and other educational institutions in the future.

The loans will be given in two forms - as commercial loans and social loans. Depending on the destination, they can be issued to refund the basic cost of education and / or to ensure the costs of food, housing, transportation and other costs during the education period. Loans can be financed through the public funds, own funds of banks, as well as other sources not prohibited by law.

According to the bill, the amount of education loans must be sufficient to fully to cover the costs of education and / or the associated costs. The annual amount of a part of the loan is directly related to education. It can not be less than the sum of the borrower's main costs on education. The sum of the education costs may not exceed the average monthly cost of rent and double amount of the subsistence level.

The loans may be granted not only to the students paying for their education. The students, receiving free education, can receive a loan for the food, housing, transportation, textbooks and stationery, etc.

A person, who has received a loan for education, may participate in one loan agreement for each degree (bachelor's, master's, doctorate).

"The commercial loans are issued with a maximum interest rate of 5 percent per annum," the bill said. "The maximum interest rate of the education loans is the same for all the authorized banks. The loans for social education will be issued only to members of poor families and without interest. The loans are granted up to 20 years."

According to the bill, the education loans are supported by the state by creating the education loan fund, issuing a loan to this fund and the authorized banks at the expense of funds envisaged in the state budget, as well as by liquidating the debt on social loans. The state must allocate the funds from the state budget to support the education loans each year.

Masimli said that according to the preliminary data, about 15 million manat are planned to be allocated from the state budget per year or 1 percent less than the funds allocated from the budget to education.

"They will not be allocated from the funds envisaged for education in the state budget," he said.
The control over the implementation of the program of loans for education and other documents prepared on the basis of the conceptual principles of the law will be implemented by the relevant executive body and the Accounting Chamber.


/Trend/