Education Loan Subsidy Scheme in India

Education Loan Subsidy Scheme in India

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Quicken Loans Arena (Photo credit: Wikipedia)

eduloan Education Loan Subsidy

Central Scheme to provide Interest Subsidy for the period of moratorium on educational loans taken by students from economically weaker sections from schedule banks under the educational loan scheme of the Indian Banks Association.

The Central Scheme to provide interest Subsidy (CSIS) for the period of moratorium on educational loans taken by students from economically weaker sections from schedule banks under the educational loan scheme of the Indian Banks’ Association (IBA) was circulated by this Ministry to all scheduled member banks of the IBA vide this Ministry’s letter of even number dated 25.05.2010, a copy of which is also available on this Ministry’s website at The Scheme is based solely on income criteria and not social background. Modalities of implementation of the Scheme of Interest Subsidy are inbuilt in the Scheme as circulated by this Ministry vide its letter of even number dated 25.05.2010.

A copy of the presentation made by Canara Bank is enclosed. For further details and related issues regarding procedure for implementation of the interest loan subsidy scheme and reimbursement of claims under the Scheme as well as monitoring of the Scheme, you are requested to kindly contact Shri G.M Narsareddy , General Manager or Shri M.A Nayagam, Asstt General Manager. Canara Bank, Head office, 112, Jayachanarajendra Road, Bangalore- 560 002.
As regards the issue of the list of recognised/approved courses/institutions to Banks it is clarified that a fresh list is not necessary since the banks are already sanctioning education loans through the IBA education loan Scheme. Banks may follow the list maintained by them under the IBA Loan Scheme and in case of doubt the Association of Indian Universities or MHRD could be approached.

The Scheme covers interest subsidy in respect of student loans to professional and technical courses which would enable the student to repay the loan advanced by banks after the moratorium either through self-employment or private/public/government employment. The scheme is effective from the academic year 2009-10 and that loans disbursed in 2009-10 would be covered under the scheme The scheme is an on-going scheme and the banks should claim reimbursement of the interest subsidy component for the period during which the scheme is operation from the Canara Bank, which is the nodal bank for this Ministry. However, interest subsidy should be claimed under the scheme only if subsidy was not being claimed by Banks against any other State Government Scheme in case, some State Governments were simultaneously offering a similar scheme of interest subsidy.

All banks are also requested to monitor the benefits accruing to different categories of loanees under this Scheme. For better statistical reference and collation of data, information pertaining to beneficiaries in respect of the categories to which they belong, namely, Scheduled Castes, Scheduled Tribes, Minorities, Other Backward Classes, and Others: alongwith sub-classification in terms of gender, differently-abled/ persons with disabilities as well as the disciplines/programmes of study, year of enrolment and programmes as also the specialisation of study, institutions, locations, State-wise and Bank-wise, may be maintained.

A Press Release issued by this Ministry is enclosed for information. When an eligible student approaches the bank to seek the benefit of the Scheme of Interest Subsidy, a voluntary disclosure could be obtained from the student/parent with regard to the above statistical requirements (as far as possible) and the same could then be furnished to Canara Bank at the time of availing the claims. All banks are requested to kindly furnish claim statements in the prescribed format ( as designed by Canara Bank) to the Canara Bank which in turn would submit the consolidated claims of the Banks to the Ministry.



12 responses to this post.

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  6. Posted by KRISHNAPRASAD on January 13, 2014 at 2:26 pm



  7. As per vote on budget announced of education loan subsidy scheme and i had got the educational loan in andhrabak on 2007.So please advice the my loan which amonth wii be clear and how approche in subsidy


  8. As you have taken you loan before March 2009. You will get subsidy on Interest on outstanding as of end December-2013. You have to pay interest for the period after 1 January 2014
    Contact your Branch manager and let him know the current scenario.
    Do share your Loan details with me. Let me suggest you best case scenario.


  9. Posted by N.VERMA on April 12, 2014 at 10:29 pm

    I have taken education loan in june 2010 from central bank of india of around 4 lacs but now i am unable to repay the interest as well as principal amount. Please help me out so that i can be allowed loan forgiveness.


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