A diploma of completed higher education opens up wide career opportunities for young people. Most Russians since Soviet times believe that higher education is the key to wealth and prosperity. However, in modern Russia, not everyone can enter a higher educational institution. There are not enough budget places for everyone who wants it, and tuition fees are beyond the power of most people. In this situation, financial institutions are ready to come to the aid of applicants or students who have already arrived by providing a loan for education. Sberbank, the program of which will be discussed, also works in this service sector.
What is an educational loan?
In the West, the practice of supporting students has been open for a long time and enjoys constant success among young people. For more than half a century, various student loan programs have been operating, including foreigners, some of which may include, in addition to tuition fees, small scholarships for the entire duration of the study. Most lending programs abroad enjoy state support when necessary. Thus, more than a quarter of all students of foreign universities study on credit.
In general, an education loan is a targeted consumer loan with a special repayment schedule. The loan term depends on the period of study and exceeds it by 5 years. For the period of training, a deferment of repayment of the loan body, and sometimes interest on it, is provided. The interest rate on such loans is usually lower than the average rate on consumer loans. You can become a borrower of such a loan from the age of 14, which is a feature of the service. The Bank will require additional guarantees, such as collateral or sureties of third parties, as well as written permission from parents. A loan can be obtained for the entire period of study according to the agreement with the educational institution, or it can be differentiated according to the schedule of payments, that is, the bank transfers the funds to the account of the educational institution in parts for each year or semester of education. The second option is preferable, since interest is not calculated on the entire amount immediately, in case of premature termination of training, the borrower does not have to pay the full initial cost of the loan, but only a part, according to the calculation at the initial rate. This must be reflected in the contract. The bank may need additional justifications for successful training - certificates on the successful completion of the semester and the absence of debts. Often, an agreement with a bank prescribes the possibility of obtaining academic leave for students and the corresponding postponement of loan terms and the recalculation of interest on a loan.
Features of educational lending PJSC "Sberbank of Russia"
In the Russian financial services market, among educational loans, the programs of one of the leaders in the banking sector of Sberbank of Russia PJSC are favorably distinguished. Given the state support programs for lending to students of certain specialties, among the banks providing loans for education, Sberbank provides the best conditions. The lending rate is from 13.9%, which is one of the lowest in comparison with other consumer lending programs. A loan is granted only in rubles for a period exceeding the training period by 10 years. Sberbank is ready to pay the full cost of training or the remaining part for payment, regardless of the income of the client. There is a “softening” in interest payments for the first and second years of using the loan, while the main debt is required to be paid after 3 months from the date of graduation, regardless of the successful completion of the diploma. That is, even having failed and completed the training ahead of schedule, the client has time to search for an additional source of income to repay the amount issued on a loan for education. Sberbank thus divides loan payments into 2 periods: the first period is the entire term for granting a deferral of payments (training period and 3 months) and provides for the payment of only interest on the loan, with payments in the first and second years being 40 and 60%, respectively; the second period provides for the payment of the body of the loan, together with accruing interest equal (annuity) payments.
A loan can be provided both by a lump-sum transfer of funds to the account of an educational institution, and by parts of a credit line, according to the agreement. In the second case, it may be necessary to provide documents confirming the successful completion of the training stages, and additional signing of the annexes to the agreement with Sberbank. A loan for education, the terms of which do not provide for a commission or insurance, is secured by a pledge or guarantee of third parties only in case of a large loan amount. If the payment terms are not respected, a penalty rate of 20% per annum is charged on the remaining loan debt.
Education Clients
Any interested student of an educational institution can act as a borrower of an educational loan from PJSC Sberbank of Russia Bank, that is, a bank needs confirmation of enrollment of an applicant to an educational institution on a paid basis, on the basis of which a special education loan is issued for students. Sberbank not only lends to students of higher educational institutions, a loan can be taken for any paid tuition at educational institutions that have the appropriate accreditation for educational activities. Students in evening and correspondence courses also have the opportunity to use credit services, along with full-time students. The borrower must be at least 14 years old, for minor clients additional written consent from legal representatives will be required, as well as permission from the guardianship authorities for the right to use a student loan. Sberbank excludes services for persons in trusteeship in accordance with the federal law “On Guardianship and Trusteeship”.
State support program for students of higher educational institutions
The Ministry of Education and Science has been conducting experiments with student support programs for several years. Loans with state support can be obtained for studies in more than a hundred universities, a wide variety of specialties. Agreements have been signed with several banks, including Sberbank, where student loans are discussed in this article. An attractive feature of a loan with state support is a reduced interest rate according to the refinancing rate of the Central Bank of Russia and an additional 5 points. For example, under the student lending program of Sberbank of Russia PJSC, the state will assume the obligation to pay half (7.5%) of the loan interest rate. The borrower will be required to pay only the remaining 7.5% rate to Sberbank. A loan for education on such conditions corresponds to foreign counterparts.
Sberbank of Russia - the key to stability for most Russians
On the whole, the attitude towards PJSC Sberbank of Russia for more than one and a half hundred years has been quite positive for customers. The program that provides students with a student loan is not an exception. Sberbank, reviews of which emphasize one of the lowest lending rates in Russia, provides an opportunity to receive education for low-income groups of the population, as well as the opportunity, independently of the help of relatives, to obtain the necessary education for adult working borrowers on their own. Payments at the beginning of use are not too high, while they discipline the borrower and prepare to fulfill the basic obligations of the loan in the second repayment period, when the loan amount must be paid together with the interest.
Service is not up to par
Of the negative reviews, mainly claims to the quality of work in certain divisions of the bank mainly related to the insufficient professionalism of the personnel providing loans for education at Sberbank. Reviews often say that student lending and state support for such programs is a fairly new area of services not only for consumers, but also for the banks themselves, which is natural, therefore there are some problems with bank specialists who are easier to get a standard consumer loan than going into the details of specialized programs. Several reviews emphasize the non-compliance with the deadlines for reviewing documents, indeed, in some regional branches of the bank, which again confirms the lack of awareness of the staff or the intentional unwillingness to work with the new service, providing a student loan for education. Sberbank, whose reviews we are interested in, in order to solve the problems with processing and to avoid delaying the process of issuing a loan and penalties from an educational institution for a delay in payment, it is strongly advised to contact a higher management or customer support hotline, as there is a difference between ordinary consumer credit and targeted loan for education is quite tangible.
The impact of the crisis
Interesting reviews were left by users who have already received a loan from Sberbank for education with state subsidies during the crisis in the economy. For several months, such students studied under the threat of immediate expulsion from an educational institution, because banks did not have the funds to secure loan obligations. Part of the liabilities of banks were temporarily able to afford the universities themselves. As a result, the situations with the training of students who fell into this difficult situation were resolved positively, the educational institutions fully complied with the educational services stated in the contract, despite interruptions in payment.
Perspective
Quite young still student lending programs in Russia can have a good development, drawing on the experience of foreign student support systems. Analysts see a good future for these types of loans, which, coupled with a stable economy and state support, can give the country a lot of trained and independent specialists. Considering the demographic upswing caused, among other things, by the state policy to support the birth rate of recent decades, the future of educational lending is not far off. Sberbank, as a participant in the state student support program and as an independent lender on standard loan conditions, is currently the most beneficial partner for most people who want to get a higher or professional education on credit.