The Tamil Nadu government has raised the limit for collateral-free education loans to Rs 20 lakh, allowing eligible students to seek higher education loans without providing property or other assets as security, Higher Education Minister P Viswanathan said.

The earlier limit was Rs 4 lakh with a student's own guarantee and Rs 7.5 lakh with a parent's guarantee. The new limit is intended to reduce financial barriers for students pursuing higher education.

Viswanathan said the state government and scheduled banks had agreed to ensure that eligible students can access the loans without difficulty. Officials from the Higher Education Department and banks will work together to facilitate the process.

The move follows a review of education loans by Chief Minister C Joseph Vijay in July. At the time, the government said it was looking to raise the existing Rs 7.5 lakh ceiling and ensure that students do not drop out of higher education because of financial constraints.

The government had also planned to appoint a professor in every district to help students apply for education loans, assess their requirements and coordinate with banks.

There is also a broader lending target behind the move. The government had said Rs 863 crore in education loans was sanctioned to around 1.02 lakh students in the previous academic year, while it aims to facilitate loans for 1.5 lakh students with a total lending target of Rs 3,000 crore in the current academic year.

The minister also announced a separate Rs 1,000 crore allocation in the name of former chief minister K Kamaraj for infrastructure improvements in government colleges. The money will be used for buildings, classrooms, laboratories, canteens, libraries and compound walls.

The higher loan ceiling comes as the state expands its efforts to improve access to higher education and address the financial barriers faced by students seeking professional and other higher education courses.