Government Approves Bill on State Support for Student Loans

Government Approves Bill on State Support for Student Loans

A bill on government support for loans to university students was approved by the Government Thursday, the Government Information Service said. The bill is aimed to make university education more accessible, Prime Minister Sergei Stanishev commented at a news conference.

Such loans will be available for undergraduate, graduate and doctoral students who are citizens of Bulgaria, other EU member states or the European Economic Area countries and Switzerland. They should be full-time students in bachelor, master or doctoral programme in a state or private university or research organization, and younger than 35, BTA reported.

The loans will be available for tuition payment and for tuition plus support. The second option, tuition plus support, will be available to students who have a baby, explained the Prime Minister.

The state will guarantee the loans, including principal and interest. The loans will have a grace period lasting for the whole time of university study or writing the borrower's doctoral thesis and one year after taking the finals or the doctoral exam. After that the loan will be repayable in equal monthly installments over a period of ten years.

A major social aspect of this lending scheme is that no security is requested of the borrower, commented also the Prime Minister. Also, the interest rates will be low - not higher than two percentage points above the base rate, and most experts expect to see banks competing for student borrowers which is sure to keep the interest rates down.

The bill provides for the forgiveness of the whole loan if a borrower has a second or more children after the completion of education. Prime Minister Stanishev said this is "a clear expression of a very strong demographic policy and commitment by the Government".

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