filter your search allcollegesexamnews

Home > News >  Government Plays a Key Role in Your Education Loan. Know How.

Government Plays a Key Role in Your Education Loan. Know How.

Government Plays a Key Role in Your Education Loan. Know How.

Last Modified : April 18, 2019

Education Loans can be quite burdening sometimes and with a lack of employment opportunities, it might get hard to pay. Also, banks can charge a rate of interest as high as 15%, which further adds on to the stress of repaying back.

Although Education Loan for India and Abroad serves as a better option than self-financing, it can get equally stressful at times. Nearly 9% of Education Loan goes default as students find it hard to repay, further affecting their credit score. Wondering how the Government plays its part in this?

Read more about how not to default your Student Loan

Government of India has been doing their utmost best to offer subsidies to students in order to relax the terms of student loans and lessen their burden. Some of the top interest subsidy schemes offered are:

Central Scheme for Interest Subsidy

CSIS scheme is formulated to cater to the needs of economically weaker sections of the society, to promote and encourage education amongst them. This scheme is applicable for students pursuing a professional course from a recognized university or institute in India. CSIS is launched by HRD Ministry, Government of India to extend financial support to deserving and meritorious students.

Key points of CSIS

  • Scheme is applicable only for courses offered in India.

  • Student must not be already enrolled in any recognized professional courses after XII in institutes established by acts of parliament.

  • Annual gross family income should not exceed INR 4.5 Lacs.

  • Interest subsidy is available up to moratorium period (Course Period+1 year).

  • Interest subsidy is available only once either for undergraduate/ postgraduate/ diploma courses.

Skill Loan Scheme

IBA Model Skill Loan Scheme is formulated by the Indian Banks’ Association to provide financial support to students aspiring to pursue skill development courses. Skill Development courses are those that will help students enhance their skills which in return will help them in their career.

Eligibility to avail IBA Model Skill Loan Scheme

  • The student should be an Indian National.

  • He/ She must have secured admission to the course offered by Industrial Training Institutes (ITIs), Polytechnics or in a school recognized by State/ Central Boards or any other recognized college or organization.

  • The admission should be secured through an entrance exam or merit-based.

Padho Pardesh Scheme

Padho Pardesh scheme came into existence under the initiative of Prime Ministers new 15 point programme to benefit the minority community. The scheme is applicable to education loans for overseas studies and aims to promote academic advancement of students belonging to minority communities. Padho Pardesh scheme provides 100% interest subsidy to students belonging to the minority community.

How to Avail ‘Padho Pardesh’ Subsidy Scheme?

Students can yield benefits of the scheme by following the below-mentioned procedure:

  • Students are supposed to inform their lending banks about the recently launched scheme of Padho Pardesh by Ministry of Minority Affairs.

  • Then the students have to submit the proof of their eligibility for the particular scheme.

  • If a student is eligible, the lending bank will feed the students information into the portal of Padho Pardesh.

  • The portal will remain open for a period of two months every quarter.

ACSISOBCEBC Subsidy

Dr. Ambedkar Central Sector Scheme of Interest Subsidy on Education Loan for overseas studies for OBCs and other economically backward classes. This scheme is implemented by the Ministry of Social Justice and Empowerment, Government of India.

The scheme was launched to provide financial assistance to deserving students belong to OBC Community or other backward classes.

Key Details about the Scheme

  • Scheme is applicable only for higher studies abroad.

  • Student must be an Indian national. If he/ she gives up his citizenship during the tenure of the loan, his/ her subsidy will be discontinued.

  • A student can avail this scheme only once for pursuing an undergraduate or postgraduate course.

  • Interest subsidy is not for students who discontinue the course or are expelled from the institution (Medical reasons will be exempted).

  • Scheme is applicable to courses leading to masters, M.Phil. or Ph.D. degree.

  • If a student violates any condition of the scheme, the subsidy will be discontinued.

  • Aadhaar number is mandatory to avail this scheme.

Credit Guarantee Fund Scheme for Education Loan (CGFSEL)

HRD Ministry has launched this scheme to promote education amongst economically weaker sections and provide them with basic education right. The scheme is available for students pursuing an approved professional course from Institute or University in India. HRD Ministry, Government of India to extend financial support to deserving and meritorious students in need.

Key points of CGFSEL

  • Scheme is applicable only for courses offered in India.

  • Student must not be already enrolled in recognized professional courses after XII in institutes established by acts of parliament.

  • Annual gross family income should not exceed INR 4.5 Lacs.

  • Interest subsidy is available up to moratorium period (Course Period+1 year).

  • Interest subsidy is available only once either for undergraduate/ postgraduate/ diploma courses.