What Is Education Loan Interest Subsidy Scheme?

With the escalating cost of education, borrowing funds continues as a viable option to finance a child’s studies. However, many people find it difficult to avail a loan because of their financial capability. An education loan interest subsidy scheme here aims to make the credit affordable for EWC and minority communities.

Under such schemes, eligible applicants can avail education loan in India at a subsidised rate of interest.

Interest Subsidy Schemes Available on Education Loans

The Government of India increased its efforts to enhance the quality and accessibility of education for students. Below are three major education loan interest subsidy schemes eligible borrowers can avail.

Interest Subsidy Schemes Purpose Eligibility
Dr. Ambedkar Central Sector Scheme Financing education abroad Economically backward classes (EBC) and various other backward classes
Padho Pardesh Scheme Financing education overseas Minority communities including Jains, Parsis and others
Central Scheme of Interest Subsidy Funding for professional or technical courses Economically weaker sections

Dr. Ambedkar Central Sector Scheme of Interest Subsidy

This interest scheme on education loans are available for students belonging to EBC. They can enjoy this benefit when pursuing their studies overseas. Some of its conditions are:

  • Candidates must be studying at Ph.D. or Masters level.
  • The annual income of the family must be within Rs. 1 Lakh in case of EBC candidates. For OBC candidates, the slab is on or below Rs. 3 Lakh.
  • Dr. Ambedkar Central Sector Scheme is also available for the moratorium period which is course duration + 1 year or 6 months post getting recruited.

Padho Pardesh Scheme

It is an education loan interest subsidy scheme available for meritorious students from the minority community and EWS to study abroad. With Padho Pardesh, the Government of India aims to offer educational opportunities, and thus, increase employability. Some of its conditions are:

  • Candidates from minority communities as declared in Section 2(c) of the National Commission for Minorities Act, 1992 are eligible for this benefit.
  • Only courses at Masters, M.Phil. or Ph.D. levels are covered under this education loan interest subsidy program.
  • Students cannot enjoy this subsidy benefit if they give up Indian citizenship while pursuing the course.
  • The annual family income of the borrower must not be above Rs. 6 Lakh.
  • This interest subsidy is available for the moratorium period comprising the course duration and 6 months after becoming employed or 1 year after course period, whichever comes first.

Central Scheme of Interest Subsidy

This scheme is for students belonging from the society's EWC or economically weaker sections. Eligible candidates can avail subsidy on education loan interest rate to pursue any technical or professional course. They must get enrolled at an accredited institution of the country for graduate or post-graduate courses. Some other conditions include:

  • The annual income of the applicant’s household must not be more than Rs. 4.5 Lakh.
  • Loans under this scheme are available up to a maximum of Rs. 7.5 Lakh.
  • The moratorium period to avail interest subsidy is the course period + 1 year.

Considering the increasing cost of education in India or abroad, you can avail Loan Against Property for Education with higher loan amount. Bajaj Finserv ensures to offer the credit at competitive interest rate with additional benefits. You can make repayments conveniently and fulfil your child’s dream with no more worries.