Interest subsidy schemes available on education loans

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The rising cost of higher education, both on a domestic and international level, often requires parents to borrow funds. Popular credit facilities include offerings like education loans,but even with these, many find it difficult to afford monthly.

To address this problem, the Government of India offers education loan interest subsidy schemes to make the credit affordable for members of the EWC and minority communities. Under such schemes, eligible applicants can avail of an education loan in India at a subsidized rate of interest. The three main interest schemes on education loans are:

Interest Subsidy Schemes



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

However, in case you are ineligible for these schemes or require a higher loan amount or flexible funding, explore options like a loan against property for education.

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Frequently Asked Questions

What is central sector interest subsidy scheme?

The Ministry of HRD has introduced a program called the Central Scheme for Interest Subsidy. It helps students from Economically Weaker Sections (EWS) with a family income up to Rs. 4.50 lakhs per year. This scheme provides interest support on Education Loans for technical and professional courses in India during the moratorium period. It operates under the IBA Model Education Loan Scheme and has been in effect since the academic year 2009-10.

Who is eligible for the Education Loan Interest Subsidy Scheme?

Eligibility criteria can vary, but generally, students pursuing specific technical or professional courses and belonging to economically weaker sections (EWS) are eligible. The scheme may also consider factors such as annual family income and other specified requirements.

How can I apply for the Education Loan Interest Subsidy Scheme?

Application processes typically involve submitting the necessary documents to the designated authorities or financial institutions. These documents may include proof of enrolment in an eligible course, income certificates, and other relevant details. Check with the implementing agency or bank for specific application procedures.

What is the duration of the interest subsidy under the scheme?

The duration of the interest subsidy often covers the moratorium period, which is the time during the course and a certain period after completion. It is important to understand the specific terms and conditions of the scheme, as they may vary.

How can I check the status of my Education Loan Interest Subsidy application?

Applicants can typically check their subsidy status through official channels. This might involve visiting the official website, using an online portal with login credentials, or contacting the relevant authorities. Banks or lending institutions involved in the scheme may also provide information on the application status.

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