Education loan interest subsidy: Government schemes to know

For many students, funding is a major cause of worry when it comes to higher education. Education loan schemes offered by many nationalized banks have enabled extremely bright students to pursue their dreams of studying abroad. However, another stress factor for such students is their education loan repayment. It is to lighten this financial load that the Indian government has introduced a number of education loan interest subsidy schemes for the benefit of such students.

Which are the Types of Education Loan Interest Subsidy Schemes?

The following education loan interest subsidy schemes were introduced by the Govt. of India for students belonging to specific social groups. All the schemes majorly focus on students coming from economically backward sections.

Central Sector Interest Subsidy Scheme (CSIS)

Padho Pardesh Scheme.

Dr. Ambedkar Central Sector Scheme

The CSIS scheme is for students who wish to pursue their higher education in India only. Since the Padho Pardesh scheme and the Dr. Ambedkar Central Sector scheme are of more relevance to students who wish to pursue their higher studies abroad, these will be explained in detail in this article.

What is the Importance of Availing an Education Loan Interest Subsidy?

Under any central government education loan interest subsidy scheme, the interest for the entire moratorium period is paid off by the government. This moratorium period is the course duration, plus one year or six months after getting employed, whichever happens, earlier. Since these subsidy schemes are only applicable to candidates who are financially weak, being able to save on any education loan-related expenses can provide them with huge relief.

How can students benefit from these interest subsidy schemes?

The biggest highlight of these subsidy schemes is the education loan interest waiver. Another important provision is that meritorious students who come from limited economic backgrounds are given priority under these schemes. In any case, these interest subsidy schemes offer a subsidy on a loan amount of Rs.20 Lakhs only. This means that even if the loan amount is higher, the subsidy will be applicable on Rs.20 Lakhs only.