The Ministry of Education (formerly Ministry of Human Resource Development) of India launched the “Pradhan Mantri Uchchatar Shiksha Protsahan Yojana: Central Sector Interest Subsidy Scheme” in 2009. During the moratorium period, the Model Education Loan Scheme of the Indian Banks’ Association (IBA) offers full interest subsidy to economically disadvantaged students with parental income up to ₹4.5 Lakhs from all sources. Only NAAC-accredited institutions or NBA-accredited programs, Institutions of National Importance, or Centrally Funded Technical Institutions (CFTIs) in India can receive the subsidy for professional/technical higher education. For scheme implementation, Canara Bank is Nodal Bank.
Technical/Professional Courses List:
- The Ministry of Education website lists Centrally Funded Technical Institutions and Institutions of National Importance at https://www.education.gov.in/technical-education-1 and https://www.education.gov.in/institutions-national-importance.
- The NBA website lists NBA-recognized professional courses at https://www.nbaind.org/accreditationprogram/Accredited Program, and the NAAC website lists NAAC-accredited universities/institutions at http://naac.gov.in/index.php/en/2-uncategorised/32-accreditBanks may ask the University Grants Commission (UGC)/All India Council for Technical Education (AICTE) and other councils for clarification on course eligibility, etc. UGC/AICTE and other councils would be requested to create Cells and identify Nodal Officers for banks to contact.The loan disbursing bank must cover only technical/professional courses under the scheme.
- Eligible Bank:
All Scheduled Banks/Regional Rural Banks (RRBs)/Cooperative Banks adopt the Scheme, which is linked to the Indian Banks’ Association Model Educational Loan Scheme.
The implementation of the Scheme will continue through Canara Bank, the Nodal Bank for the Ministry of Education. Implementation and monitoring will be decided with Canara Bank.
Objectives of the Scheme:
- To provide financial assistance to students from economically weaker sections.
- To support students in pursuing professional/technical courses in institutions of repute.
- To make higher education more accessible for students from economically disadvantaged backgrounds.
List of Eligible Courses:
- Professional/Technical Courses such as engineering, medicine, law, etc.
- The courses must be pursued in NAAC accredited institutions, or institutions that are accredited by NBA, or in Institutions of National Importance or Centrally Funded Technical Institutions (CFTIs).
For a detailed list of eligible courses and institutions, you can refer to the following websites:
Benefits:
- Interest Subsidy: Full interest subsidy on the education loan during the moratorium period (Course Period + One Year).
- Loan Amount: Subsidy is applicable for loans up to ₹10 Lakhs.
- No Collateral Required: No collateral security or third-party guarantee is required for loans up to ₹7.5 Lakhs.
- Moratorium Period: The interest subsidy covers the moratorium period, which includes the course period plus one year.
- Loan Interest Rates: As per the Benchmark Prime Lending Rate (BPLR)/Base Rate of the lending bank.
Eligibility:
- Parental Income Limit: The annual family income should not exceed ₹4.5 Lakhs from all sources.
- Eligible Institutions: Students must be enrolled in professional/technical courses from NAAC accredited institutions, NBA accredited programmes, or Institutions of National Importance.
- Educational Loan: The scheme is only applicable to students who have availed an education loan under the IBA Model Education Loan Scheme.
- Previous Scholarship: Students who are already receiving other Central or State Government scholarships are not eligible.
- Discontinuation: The subsidy is not applicable if the student discontinues their studies before completing the course, unless due to medical reasons.
Application Process:
Online Application
- Visit the official portal:
- Register and apply for an education loan under the scheme.
- Submit necessary documents for loan approval.
- To apply under the scheme, the eligible student has to visit the nearest Bank branch office from where he/she has availed the facility of Education Loan for studying from a recognized institute in India.
- Note: Nodal Bank shall disburse the subsidy in the Education Loan account of the beneficiaries in DBT mode through PFMS Portal. It is the sole responsibility of the lending bank to claim interest subsidy on behalf of eligible beneficiaries on a yearly basis.
Documents Required
- Identity Proof: Aadhaar Card.
- PAN Card.
- Income Proof: Certificate issued by a competent authority.
- Educational Certificates.
- Proof of Admission to a recognized course.
- Bank Account Details.
- Any other required documents specified by the bank.
Frequently Asked Questions (FAQ):
Q1: The Central Sector Interest Subsidy Scheme (CSIS) has what as its aim?
The program seeks to cover the interest rates during the moratorium period on loans taken out for higher education, therefore giving financial aid to students from economically poorer areas.
Q2: The scheme is open to who?
Students seeking professional/technical degrees from approved universities whose parental income ranges from ₹4.5 Lakhs per ann.
Q3: Does one have to take out an education loan in order to benefit from the interest subsidy?
Indeed, the incentive is just for school loans taken out under the Model school Loan Scheme of the Indian Banks’ Association (IBA).
Q4: Under what maximum loan value qualifies for the subsidy?
For loans up to ₹10 lakh, the plan offers interest subsidies. Interest subsidy is not applicable for any loan amount higher than ₹10 Lakhs.
Q5: What documents are required to apply for the scheme?
Documents include Aadhaar, PAN Card, income proof, educational certificates, proof of admission, and bank account details.
Q6: Where is the interest subsidy credited?
The interest subsidy is credited directly to the education loan account of the student through DBT mode via the PFMS Portal.
Q7: Who can claim the subsidy?
The bank disburses the subsidy, and students must claim it via the lending bank.
Q8: What is the income certificate issuing authority?
The income certificate must be issued by a Competent Authority, such as a government office.
Q9: Is it necessary to submit the income certificate every year?
The income certificate is required for the initial application. Re-submission may be necessary if there are changes in income or circumstances.
Q10: What is the role of Canara Bank as the Nodal Bank?
Canara Bank is the Nodal Bank responsible for processing and disbursing the subsidy to students’ loan accounts.