The practice of giving commercial banks education loans for education in higher educational institutions of the Republic on a fee-contract basis was introduced with the 2001/02 academic year.

This opportunity emerged after adoption of the resolution of the Cabinet of Ministers of Republic of Uzbekistan from 26.07.2001, № 318 "On granting educational loans for studying in higher educational institutions on a fee-contract basis.

THE CONDITIONS FOR THE ISSUANCE

According to the Regulation on granting educational loans for training on a paid contractual basis at higher educational institutions, educational loans issued by commercial banks on students - citizens of the Republic of Uzbekistan adopted on full-time departments of higher educational institutions, students, their parents or Trustees (hereinafter the borrower).

The act regulates the maximum term of granting of credits to the persons accepted for training (including training period in these terms):

in the bachelor up to 10 years;
master's degree and 5 years.

The period of military service within the specified period is not included. Also in this period does not accrue interest for the loan.
Paragraph 5 of the Regulations set a maximum interest rate on educational loans - not exceed the current refinancing rate of the Central Bank of the Republic of Uzbekistan (currently 12%). The interest rate can change as the change of the refinancing rate, this condition should be reflected in the credit agreement.

The above-mentioned resolution of the Cabinet of Ministers provides concessional loans. In particular:

a) all orphans, inmates of boarding schools "(mercy" and childhood invalids I and II groups the loan is issued with a zero interest rate;

b) for students from poor families provided payment of 50% of the charged amount of the interest payment for the loan funds from the State employment promotion Fund. The definition of poor families is carried out by bodies of citizens ' self-government in accordance with the applicable Order of accounting of low-income families, granting and payment of financial aid.

Accrual and payment of interest on the loan starts from the time of issuing the amount transferred to an educational institution, and the principal amount - at the expiration of three months after the student officially established period of training in a higher educational institution excluding the terms of re-training on individual courses.

THE ORDER OF REGISTRATION OF CREDIT

For the educational loan, the borrower is in commercial Bank the following documents:

a) application for issuance of an educational loan;

b) duly agreement for training on a fee-contract basis between the student and the educational institution (bilateral contracts). In the contract should be specified term of tuition and fees for a year. In the case of changes in subsequent years, the values of the tuition fee in the contract shall be amended in what higher educational institution in 10 days a written notification to the Bank, after which the loan contract between the borrower, the Bank and the higher educational institution makes the necessary changes;

с) reference from the place of residence of the borrower issued by local authorities or associations of private owners of housing;

d) document on the provision of credit repayment. In order to avoid risks of non-repayment of the loan, the borrower must provide the Bank with one of the following forms of security with mandatory condition realizability:
-    pledge of property or securities. In this case the Bank is determined by the market price of property or securities;

- guarantee of the Bank;
-    the third party guarantee. In this case, the Bank assesses the financial condition of the guarantor on the basis of, for example, presents the income statement of the guarantor;
- insurance of insurance of the risk of non-repayment of the loan by the borrower;
- guarantee of self-government institutions of citizens (only round orphans, inmates of boarding schools "(mercy", invalids since the childhood I and II groups and people from low-income families).

Commercial Bank within 10 working days after submitting to the Bank an application for the issue of the education credit and a full package of documents to it shall consider and sign the loan agreement or, in the case of a decision of refusal to give the applicant a written report explaining the reasons for the refusal to grant credit.

A credit agreement is concluded between the Bank, the borrower and the higher educational institution. To issue educational credit for training students from low-income families is a multilateral credit agreement between the Bank, the borrower, the higher education institution and the stewards of the State employment assistance Fund (the Fund) with a precise definition of the rights and duties of each party.

GRANTING, REPAYMENT AND INTEREST PAYMENT

Educational loan is granted by transferring funds from the loan account of the borrower on the Deposit account until the demand for higher educational institutions on the basis of written instructions of the borrower.

Funds transfer is carried out every six months by dividing the total amount of annual tuition fees in two equal parts. The initial payment for training in the first half of newly enrolled students is performed before 1 October of the current year, for the second half - before March 15 of the following year. Starting from the second year of study payments for the loan are made not later than the 5th day of the first month of each semester (September and March).

Payment of interests is made by the borrower on the terms and conditions stipulated in the loan agreement. As a rule, the Bank set a specific number of months that you would pay the interest payment. If before the established deadline, the borrower does not interest payment on the loan, the Bank charges a penalty for each day of delay.

Payment of interests for education loans for education of students from low-income families is made by the borrower and the Fund in equal installments on the half part of the amount of accrued interest on a monthly basis. At that, the Fund shall transfer the amount of accrued interest payment order within three working days after receipt of notice from the Bank.

In the case of expulsion before the end of the training period the administration of the higher educational institutions within ten working days from the date of issuance of the order of the rector shall inform the Bank about it, and the borrower, in turn, is obliged within three months to repay the full amount of the loan and accrued the interest rate.

In case of late notification of the Bank of the higher educational institution of expelling student educational institution is obliged to effect payment of accrued during this period,% Bank (paragraph 19 of the Regulations).
These conditions must be specified in the loan agreement.
Source: newspaper "Solik info"