The cabinet committee has approved expanding Higher Education Financing Agency's capital base to Rs 10,000 crore from the current Rs 3,300 crore.
The Union Cabinet on July 4 gave the Human Resource Development (HRD) Ministry permission to raise Rs 1 lakh crore to fund education infrastructure and research.
The funds will be raised from education bonds, commercial borrowings and corporate houses. The money will be raised through Higher Education Financing Agency (HEFA), a non-banking financial institution under the HRD Ministry.
The cabinet committee approved expanding HEFA's capital base to Rs 10,000 crore from the current Rs 3,300 crore.
"The cabinet committee on economic affairs...approved the proposal for expanding the scope of Higher Education Financing Agency (HEFA) by enhancing its capital base to Rs 10,000 crore and tasking it to mobilize Rs 100,000 crore," Law Minister Ravi Shankar Prasad said, as quoted by Mint.
The funds raised will be provided as loans to state-run higher educational institutions, including medical colleges, and central government-run school chains such as Kendriya Vidyalayas and Navodaya Vidyalayas.
Technical institutions such as IITs, IIMs, and NITs that are over 10 years old will have to repay the loan from their internal earnings.
"Institutions which started between 2008 and 2014 will repay 25 per cent of the principal portion from internal resources, and receive grant for the balance of the principal portion," the official statement said.Central universities that are over 10 years old will have to repay 10 percent of the loan and will receive a grant for the remaining amount. Newer universities will receive grants to establish permanent campuses.