Educational loans must primarily benefit the student, and cannot be denied based on the co-applicant's credit score, as it contradicts the scheme's purpose.

ORDER :

1. This Writ Petition is filed, to direct the respondents to disburse the education loan of Rs.7,26,000/- to the petitioner vide the application bearing No.2473739 and the representation dated 23.08.2024, by accepting third party guarantor.

2. Heard the learned counsels on either sides and carefully perused the materials available on record.

3. The petitioner got admission into the course, namely, Bachelor of Naturopathy Yogic Science, a professional course of medicine at Thangapazham Medical College, Vasudevanallur, Tenkasi District, a college affiliated to Dr.MGR Medical University, Chennai. The petitioner got selected through the admission process by the Government of Tamil Nadu conducted for the academic year 2023-2024 and got selected under the management quota on merit basis. The petitioner hailed from a lower middle class family and his father passed away before 3 years. Before joining the BNYS course at Thangapazham Medical College at Vasudevanallur, Tenkasi, he was informed that the course is eligible for education loan and subsidy sponsored by the Central Government, namely Central Sector Interest Subsidy Loan Scheme and the college ensured him that they would arrange the education loan. Only based on such assurance, he joined the course in their College and however, later he was directed to approach any bank in his residential area for education loan. Following which, the petitioner approached the second respondent bank within whose jurisdictional limit the petitioner had his permanent residence and savings bank account. The second respondent instructed him to apply the loan through the dedicated portal, namely Vidyalakshmi, an online portal initiated by the Government of India for the purpose of availing education loan and services. He applied through the said portal on 18.04.2024 along with requisite documents such as income certificate, mark statements, Aadhaar, etc, vide application No. 2473739. However, even after a passage of 100 days, his application was kept pending. Thereafter, the designated official of the second respondent bank during paperwork on the request of the petitioner, reduced the loan amount from Rs.9,26,000/- to Rs.7,26,000/-. However, the official found that the credit score of the petitioner's mother, who is a co-applicant, is only 627 and hence, they cannot forward the petitioner's application to the first respondent for sanctioning the same. The reason behind the reduced credit score of the petitioner's mother is that she had been a guarantor of a SME loan availed by the petitioner's bereaved father at IDBI Bank, Kovilpatti. However, due to the untimely death of the petitioner's father under the penurious circumstances suffered by the petitioner's family, the officer concerned of the said IDBI Bank has written off the loan which is a meagre amount of Rs.1,05,000/-. Due to the said written-off, the credit score of the co-applicant, that is, the petitioner's mother fell short. Although she had no credit facility, she had never availed any credit facility elsewhere. However, the said written-off was not at all informed by the officer at IDBI Bank before scrapping the same to the petitioner or his family. When the petitioner communicated the bank's designated official on 22.08.2024 and requested the bank officials to consider third party guarantee acceptable to the bank in addition to the co applicant, the second respondent bank replied that, reduced cibil score of his parent having fallen below 730 would make it difficult for them to process the petitioner's application for education loan. In this regard, the petitioner made a representation on 23.08.2024 to disburse the education loan of Rs.7,26,000/- to the second respondent bank. The same was not considered and hence, this Writ Petition came to be filed.

4. The matter in hand is no more re integra. This Court has dealt with a similar case of educational loan in a petition in W.P. (MD) No. 5144 of 2018 and this Court by order dated 12.0