May 9, 2019


Citizens are the biggest asset of any country because it is, they who ultimately determine the destiny of a country through their work and actions. With over 1.3 billion people, India is home to the second largest population in the planet. This also makes India the largest democracy in the world.

However, big population creates even bigger challenges for the country. Considering the fact that over half of the population in India is below the age of 25 years, it faces an uphill task of providing access to quality education. India has made much progress since independence in the field of higher education by establishing several educational institutions of international repute. Yet, despite that, the number of educational institutions providing quality education at degree levels still remains very low.

As a result, each year, students from almost all strata of society apply for graduate or post-graduate degree courses in colleges and universities abroad. Indian students mostly prefer developed countries like the US, the UK, Canada and Ireland for higher studies.

But good quality education comes at a cost. The cost of education is very high not only in developed countries but also in good quality educational institutions in India. This compels students to take education loans from financial institutions such as the banks and NBFCs (Non-Banking Financial Companies). So, in order to provide some relief to such students, the government has come up with schemes which intend to provide financial support in terms of subsidies to those who either belong to backward classes or come from economically weaker sections of society.

In this blog, Student Cover brings you some of the centrally sponsored schemes carried out by the government to provide financial support to those students who have taken loan to study in India or abroad.


The Central Sector Interest Subsidy Scheme (CSIS) was first introduced in the year 2009 with primary objective of ensuring that no student is deprived of the opportunity to pursue higher education for want of finances. Meant for students who wish to pursue higher education in educational institutions in India, the scheme provides complete relief in terms of due interest during the moratorium period in education loans.

Those Indian students who parental or family income is less than Rs 4.5 Lakhs per annum are eligible to avail the benefits of this scheme for pursuing professional or technical courses in higher education institutions in India. The scheme applies to only on those educational institutions which have been accredited by the National Assessment and Accreditation Council (NAAC) of India, National Board of Accreditation (NBA), Institutions of National Importance or Central Funded Technical Institutions. Those institutions, such as medical colleges, which are not covered by the aforementioned accreditation organizations, require approval from their respective accreditation bodies.

This scheme has been adopted by all scheduled banks in the country. The scheme also applies only on those loans which have been taken under model education loan scheme which is provided education loan up to Rs. 7.5 lakhs without any collateral security or third-party guarantee. The interest due during the moratorium period (the course period plus one more year) is borne by the government.

Those students who wish to avail this scheme are required to show proof of their economic status. This can be obtained from an authorized public authority of the state government. If a student wishes to service the interest due during the moratorium period when the government is providing subsidy, he or she gets 1% concession on the interest rate.


“Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Education Loans for Overseas Studies for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs)” was launched to help those meritorious students who have taken loans to pursue higher education aboard. The aim of this scheme is to help meritorious students get access to good quality higher education abroad which would uplift them economically by enhancing their employability.

This scheme is applicable on Masters degree, M.Phil. and Ph.D. courses and provides interest subsidy during the moratorium period. The benefits of this scheme can be availed only once, either during Masters/M.Phil./Ph.D. It also requires that the student has taken education loan from a scheduled bank in India.

Those students who apply for this scheme under OBC or EBC category are required to submit copies of OBC and EBC certificates duly certified by a competent authority. For OBC applicants, the parental or family income shall not exceed the income level set to determine the status of OBC candidate as belonging to Non-Creamy Layer. For EBC candidates, the income ceiling has been fixed at Rs. 2.5 Lakhs per annum. Both OBC and EBC applicants are required to submit proof of their income to prove that they do not exceed the income ceiling.

The subsidy is awarded to the applicants based on the recommendation of the Recommendatory Committee headed by Joint Secretary in-charge of Backward Classes Division. Since the scheme is limited in nature, not all eligible applicants are entitled to the benefits of this scheme. However, out of the total amount kept for providing subsidy under this scheme, 50% is earmarked for interest subsidy for female applicants.


“Padho Pradesh Scheme of Interest Subsidy on Education Loans for Overseas Studies for the Students belonging to the Minority Communities” was launched as part of Prime Minister Dr. Manmohan Singh’s 15 point program for the welfare of minorities. The aim of the scheme was to award interest subsidy to those students who belonged to economically weaker sections among minority communities in India.

The scheme covers those students who have taken education loans to pursue Master’s degree, M.Phil. or Ph.D. in a college or university abroad. This scheme bars those students belonging to the minority community who also happen to belong to SC/ST or OBC community to avail interest subsidy on other similar schemes meant specifically for those sections of the society. The number of beneficiaries who can avail the benefit of this scheme have been fixed for different states and union territories. In other words, each state and union territory have a fixed quota of students belonging to the minority community who can avail the benefits of this scheme.

The scheme also requires that those students who have already got admission to a course in a foreign college or university must apply for benefits under this scheme during 1 year of the course itself. Those students who apply after completion of 1st year of the course are not eligible for benefits under this scheme. The parental or family income ceiling for students applying for his scheme has been fixed at Rs. 6 lakhs per annum. Students are required to submit certified proof of this income in order to avail this scheme.

Students can for this scheme online through a portal opened by designated banks on direction of Ministry of Minority Affairs. The subsidy is awarded to applicants based on the recommendation of a selection committee headed by Additional/Joint Secretary in-charge of the scheme.


We hope that readers will find the content of this blog informative and helpful while applying for education loan subsidy scheme provided by the government to pursue higher education either in India or abroad.

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