“Dr Ambedkar Central Sector Scheme of Interest Subsidy on Educational Loans for Overseas Studies for Other Backward Classes (OBCs) and Economically Backward Classes (EBCs)” is an Education Loan Scheme by the Department of Social Justice and Empowerment, Ministry of Social Justice and Empowerment.
Implementing Agency
- The scheme is implemented by a Nodal Bank as per the MoU between Banks and the Ministry of Social Justice & Empowerment.
- The Nodal Bank will handle the processing, sanctioning, and disbursal of the interest subsidy claims.
Scope of the Scheme
- The scheme covers only the interest payable during the moratorium period (course duration + one year or six months after employment, whichever is earlier).
- The Principal amount of the loan is not waived; students are responsible for repayment after the moratorium period.
- Maximum eligible loan amount for interest subsidy: ₹20,00,000.
Objective
- To provide financial relief to OBC and EBC students by covering the interest on education loans for overseas studies.
- To enhance educational and employment opportunities for meritorious students abroad.
Benefits
- Full interest subsidy on education loans during the moratorium period (course duration + grace period).
- Students will only have to repay the principal amount and interest beyond the moratorium period.
- 50% of the funds are earmarked for girl students under this scheme.
Important Notes:
- The Government of India will bear the interest on the education loan only during the moratorium period.
- After the moratorium period, students must repay the loan as per bank terms.
Eligibility Criteria
- The applicant must be a student belonging to OBC or EBC categories.
- The student must have secured admission in a recognized Master’s, M.Phil., or Ph.D. program abroad.
- The student must have availed an education loan from a Scheduled Bank under the Indian Banks Association (IBA) Education Loan Scheme.
- The total family income from all sources should not exceed ₹8,00,000 per annum.
Reservation & Special Provisions
- 50% of the funds are reserved for female candidates.
- Preference will be given to meritorious students based on their academic records.
Application Process
Offline Application Process
- Linked with IBA Education Loan Scheme: Students must first take an education loan from a Scheduled Bank under the IBA guidelines.
- Bank Coordination: The Nodal Bank will define the exact process for applying for interest subsidy.
- Processing & Recommendation:
- Applications will be reviewed by a Recommendatory Committee headed by the Joint Secretary, Ministry of Social Justice & Empowerment.
- The committee will include representatives from the Finance Division, Nodal Bank, and concerned departments.
- Approval & Disbursal:
- Interest subsidy is awarded quarterly based on applications submitted by the bank.
Documents Required
- Passport-size Photograph
- Aadhaar Number
- Proof of Educational Qualification (marksheets, degree certificates)
- Bonafide Certificate from the institution abroad
- Caste Certificate (for OBC candidates)
- Income Certificate from an authorized State Government/UT official
- Bank Details (Aadhaar-linked bank account)
Frequently Asked Questions (FAQs)
Q: Is there a special allocation for female students?
A: Yes, 50% of the total budget is reserved for girl students.
Q: Can this subsidy be availed for courses that are partly in India and partly abroad?
A: No, the scheme applies only to full-time Master’s, M.Phil., and Ph.D. courses conducted abroad.
Q: Can students request an extension of the moratorium period?
A: The moratorium period is fixed as per the loan agreement. Extensions are subject to banking regulations.
Q: Are candidates from State/UT OBC lists eligible?
A: Yes, as long as they belong to the OBC category as per State/UT lists and meet the income criteria.
Q: How can students apply for this scheme?
A: Students need to approach the bank from which they took the loan, which will coordinate with the Nodal Bank for subsidy processing.