Education Funding Solutions in India: Govt. Initiatives at a Glance!

Education Funding Solutions in India In the pursuit of higher education, aspirations soar high and often transcend borders, however, in the absence of a complete education funding solution, it takes its toll on countless dreams and desires. As aspirants, we all seek to find multiple avenues for education funding solutions and much needed financial support to provide a fillip to our academic dreams. Financial constraints often emerge as a significant hurdle in the path of pursuing studies within India as well as overseas, where the cost of education continues to rise year after year. Accessing low-interest education funding solutions becomes an imperative for those willing to make a move for both national and educational pursuits overseas. This article delves into finding matching avenues available to Indian students, offering insights into navigating low-interest education funding opportunities made available by the Indian governments at various levels to empower numerous dreams.

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A Realistic Need Assessment!

An escalating costs of both domestic and international education emphasise the pressing need for accessible education funding solutions for students pursuing their studies across various levels in different academic pursuits. Whether students are pursuing undergraduation, postgraduation, or doctoral studies and beyond for that matter, the substantial financial requirements necessitate careful consideration. Furthermore, in the face of intensifying competition in the job market, the pursuit of higher education and state-of-the-art skill enhancements have evolved into a fundamental requirement for career progression and skill consolidation. Therefore, the imperative of securing affordable financing options becomes of paramount importance for students hailing from diverse socio-economic backgrounds.

Exploring Government Funding Solutions at a Glance!

In India, various government schemes aim to support students in their educational endeavours. The Central Government’s interest subsidy schemes, such as the Central Sector Interest Subsidy Scheme (CSIS), CGFSEL Education Loan Scheme, State government loan schemes, etc. endeavour to provide financial assistance to economically weaker sections by subsidising the interest on education loans. These schemes not only alleviate the financial burden but also foster inclusivity in education.

Central Sector Interest Subsidy (CSIS) Scheme

Aiming to reduce the cost of higher education, the Ministry of Education, previously known as the Ministry of Human Resource Development (MHRD) introduced the Central Sector Interest Subsidy (CSIS) scheme in April 2009. It intends to extend support to students hailing from economically disadvantaged backgrounds who want to pursue professional or technical courses in India and have an annual family income up to ₹4.5 lakh. The scheme offers a subsidy that pays the interest on loans already availed. Within the confines of the IBA model education loan plan, students may receive up to a maximum subsidy loan of ₹10,00,000 under this scheme, regardless of the approved loan amount. There will be a one-year moratorium period after completing the course on the provision of subsidy. Recipients must pay the interest on the remaining loan amount in line with the terms of the education loan plan after the moratorium period.

Application Link: JanSamarth Portal

CGFSEL Education Loan Scheme

The CGFSEL Education Loan Scheme is a public initiative of the National Credit Guarantee Trustee Company Ltd. (NCGTC) set up by the Department of Financial Services, Ministry of Finance, Government of India. This scheme provides education loans up to ₹7,50,000 to extend a helping hand to students pursuing higher education in India and abroad, without any necessary prerequisite of collateral or third-party guarantee for their loan. The maximum interest rate that can be charged on the education loan under the CGFSEL scheme is 2% over the base rate. Base rate is the minimum interest rate set by the RBI below which Indian banks are not allowed to lend to their customers.

Application Link: 

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CGFSEL Education Loan Scheme

NMDFC Education Loan Scheme

The National Minorities Development & Finance Corporation (NMDFC) launched the NMDFC Education Loan Scheme in order to offer financial aid to students from minority communities. Christians, Parsis, Muslims, Sikhs, and Buddhists are among the eligible religious minorities. State Channelising Agencies (SCAs) are in charge of implementation of the scheme in different states such as Kerala and Jharkhand. The programme offers education loans for a maximum of five years to students pursuing professional and technical courses that are focused on the workforce. Under this programme, students will receive education funding solutions up to ₹30,00,000 for pursuing studies overseas and up to ₹20,00,000 for pursuing their studies in India at nominal interest rate.

Application Link: National Minorities Development & Finance Corporation (NMDFC)

NSFDC Education Loan Scheme for SC Students

The National Scheduled Castes Finance and Development Corporation (NSFDC) offers the  NSFDC Education Loan Scheme to the students hailing from SC community willing to pursue  their studies in regular government-approved professional/technical courses in India and abroad. Under this initiative, students have a chance to receive an education loan up to ₹20,00,000 to study in India and up to ₹30,00,000 to pursue their studies overseas, with a maximum interest rate of 4%. Female applicants will receive a loan scholarship with a 0.5% interest refund. The payback duration for education loan is up to 10 years for loans up to ₹7,50,000 and 15 years for loan amount exceeding ₹7,50,000.

Application Link: National Scheduled Castes Finance and Development Corporation (NSFDC)

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Goa Interest-Free Education Loan (IFEL) Scheme

The Government of Goa has introduced the Goa Interest-Free Education Loan (IFEL) Scheme. The primary goal of this initiative is to provide interest-free loans to assist young students of the State of Goa in pursuing higher education in recognised certificate and degree courses at the undergraduate and postgraduate levels in India and overseas. The loan amount is up to ₹16,00,000 with a repayment period of up to five years. This school loan initiative provides interest-free loans to students who repay the loan amounts on time.

Application Link: Goa Interest-Free Education Loan (IFEL)

Himachal Pradesh Education Loan Scheme

The Himachal Pradesh Education Loan Scheme provides education loans up to ₹10,00,000 for pursuing studies in India and ₹20,00,000 for pursuing their studies abroad at a nominal interest rate of 3% and 4%, respectively. It is dedicated to students hailing from religious minority communities and Persons with Disabilities (PwD) categories in the State of  Himachal Pradesh. This scheme applies to undergraduate and postgraduate professional/technical courses, as well as courses approved by the governments, UGC, or AICTE. The policy provides benefits to minority populations in the State of Himachal Pradesh including Muslims, Sikhs, Buddhists, Christians, and Parsis.

Application Link: Himachal Pradesh Education Loan Scheme

Himachal Pradesh Education Loan Scheme

Exploring Government Scholarship Initiatives!

Scholarships and grants present a meaningful avenue to students willing to finance their studies with an education funding solution without the burden of interest. Governmental organisations offer scholarships based on academic merit, financial need, and other specific criteria. Diligent research and applying for relevant scholarships can significantly mitigate the financial strain associated with higher education and help gaining a matching education funding solution.

National Overseas Scholarship Scheme

The Ministry of Social Justice and Empowerment, Government of India is spearheading the National Overseas Scholarship Scheme every year. The scholarship application is open to students from the Scheduled Caste (SC), Denotified Nomadic and Semi-Nomadic Tribe, Landless Agricultural Labourer, and Traditional Artisan categories usually in the month of February and March every year. The programme offers financial support to students in the aforementioned categories to help them pursue Master’s or Doctoral degree in any subject of study at recognised universities overseas. Selected applicants receive other benefits such as medical insurance, visa and tuition fees in addition to a USD $15,400 annual maintenance allowance.

Application Link: click here

Swami Vivekananda Scholarship for Academic Excellence

The Government of Rajasthan is offering the Swami Vivekananda Scholarship for Academic Excellence Scheme 2024, formerly known as the Rajiv Gandhi Scholarship for Academic Excellence to students willing to pursue their studies in India and abroad for undergraduate, graduate, doctoral, and post-doctoral research programmes in select institutions in India and the world. This programme intends to reward scholarships to residents of Rajasthan who have received admission offers in reputed universities or colleges to pursue their higher studies. This contains the top NIRF ranked 50 universities in India and the top 150 universities worldwide on the basis of QS World Rankings. Full tuition costs, including bench fees if relevant, will be awarded to selected students along with an allowance for living expenses.

Application Link: click here

Marang Gomke Jaipal Singh Munda Overseas Scholarship

The Department of Scheduled Tribe, Scheduled Caste, Minority and Backward Class Welfare, Government of Jharkhand, is offering the Manrang Gomke Jaipal Singh Munda Overseas Scholarship to students hailing from SC, ST, Minority, and Other Backward Communities. The programme seeks to provide the next generation of opinion and decision-makers, and leaders with the information and abilities needed to effect change and promote social and economic advancement. In addition to other benefits, the chosen individuals will receive an annual maintenance stipend.

Application Link: 

Prabuddha Overseas Scholarship Scheme

The Prabuddha Overseas Scholarship Scheme of the State Government of Karnataka aims to provide financial assistance to students from the SC/ST communities who wish to pursue their undergraduate, postgraduate, and doctoral (PhD) programs in various fields of study. The scholarship scheme is available to students  pursuing their studies in the fields of Engineering and Management, Pure Sciences, Applied sciences, Agriculture Sciences and Medicine, International Commerce, Economics, Accounting Finance, Humanities, Social Science, Fine Arts, and Law. The government will cover the cost incurred on fee, living expenses, and airfare. The scholarship quota also includes a reservation for women (33%) and Physically Handicapped (5%) candidates. Applicants must have obtained unconditional Offer Letter only from foreign universities/institutions that are ranked within the overall Global Ranking 325 published in QS world Ranking & US news. Applicants with an annual family income of less than 8,00,000 will receive 100% coverage; students with an annual family income between 8,00,000 – 15,00,000 will receive 50% coverage; and students with an annual family income greater than 15,00,000 would receive 33% coverage.

Application Link: click here

Prabuddha Overseas Scholarship Scheme

Chief Minister’s Overseas Scholarship Scheme for Minorities

The Minority Development Department, Government of Telangana, has launched the Chief Minister’s Overseas Scholarship Scheme for Minorities. This initiative is for students who desire to pursue their PG and Ph.D. degree programmes abroad. Under this scheme, 500 students from minority communities will receive a scholarship worth up to 20,00,000 or the amount specified in their admission letter, whichever is less. Students will also receive the cost incurred on one-way flight ticket in economy class. The scheme is expected to go live in the month of August 2024.

Application Link: click here

How Should Applicants Approach Repayment of an Education Loan?

While securing low-interest education funding is crucial, understanding repayment obligations is equally important. Students must meticulously plan their repayment strategies to avoid financial strain post-completion of their studies. Opting for flexible repayment plans, exploring grace periods, and considering income-driven repayment options can ease the burden of loan repayment. Additionally, prudent financial management during the academic tenure can help minimise the debt burden, and thus ensure a smoother financial trajectory post-graduation.

In the conclusion part, it would be appropriate to state that empowering aspirations through low-interest education funding solutions is pivotal in enabling students to pursue their academic dreams, both nationally and internationally. By leveraging government initiatives, students can gain access to financial resources needed to realise their educational goals. Moreover, prudent financial planning and repayment strategies ensure a sustainable approach to managing educational debt. As India progresses towards a knowledge-based economy, investing in higher education becomes not just a personal endeavour but also a national imperative, driving innovation, excellence, and inclusive growth.

Frequently Asked Questions (FAQs)

Who are the major providers of government scholarships and education loans in India? 

The major providers of  government scholarships and education loans in India are as follows:

  • Government of India: The Indian government offers various scholarships and education loan schemes through different ministries and they are as follows:
    • Ministry of Minority Affairs
    • Ministry of Social Justice and Empowerment
    • Ministry of Tribal Affairs
    • Ministry of Human Resource Development
  • State Governments: Each state governments in India have their own scholarship and education loan programs dedicated to the residents of that particular state. These programs are often administered through the respective state education departments.
  • Public Sector Banks: Public sector banks in India, such as State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), offer education loans with attractive interest rates and flexible repayment options. These loans are often supported by government schemes like the Central Sector Interest Subsidy Scheme (CSIS) or the Credit Guarantee Fund Scheme for Education Loans (CGFSEL). 
  • Scholarship Programmes by Universities and Colleges: Many universities and colleges in India offer their own scholarship programmes to meritorious students or those from economically weaker sections of society. 
  • Other Government Bodies and Organisations: Various government bodies and organisations such as the University Grants Commission (UGC), All India Council for Technical Education (AICTE), and Indian Council for Cultural Relations (ICCR) also offer scholarships and financial assistance to students.

Who is eligible for the Central Sector Interest Subsidy (CSIS) loan scheme?

Answer – Students from economically disadvantaged backgrounds whose annual family income does not exceed ₹4,50,000 per annum are eligible under the Central Sector Interest Subsidy (CSIS) loan scheme.

Is it mandatory to avail education loan for getting interest subsidy benefits under the Central Sector Interest Subsidy (CSIS) loan scheme?

Yes, only students who have availed education loan from scheduled banks are eligible for the interest subsidy.

Who is responsible for higher education funding in India?

Overall, the responsibility for higher education funding in India is shared by the central government, state governments, and various regulatory and funding bodies, each playing a vital role in supporting and promoting higher education in the country. In general, the responsibility for providing higher education funding solutions is shared among the following entities including others. They are as under:

  • Central Government
  • State Governments
  • University Grants Commission (UGC)
  • All India Council for Technical Education (AICTE)
  • Department of Science and Technology (DST)
  • Department of Biotechnology (DBT)
  • Department of Higher Education (DHE) etc.

Can a beneficiary claim the subsidy directly from the Government of India?

No, the beneficiary cannot claim the subsidy directly from the Government of India. It is the prime responsibility of the financing Bank/Branch to claim subsidy on behalf of the beneficiary. 

Who are eligible under the NSFDC Education Loan?

Answer – Students from the Scheduled Caste categories who are willing to pursue higher education in India or abroad can avail for the National Scheduled Castes Finance and Development Corporation Education Loan if their annual family income does not exceed ₹3,00,000 per annum.

Who are eligible applicants under the Himachal Pradesh education loan scheme?

Meritorious students from religious minorities and Persons with Disabilities (PwD) who are residing in Himachal Pradesh and are pursuing their professional/technical courses are eligible under this scheme.

What are the affiliated courses falling under the Central Sector Interest Subsidy (CSIS) loan scheme?

Students willing to pursue technical and professional courses can pay a visit to the following links provided below in order to check the affiliated courses/institutes.

  • Centrally Funded Technical Institutions –
  • Institutions of National Importance –
  • NAAC accredited universities/institutions – 
  • NBA recognized professional courses – 

Who are the income certificate issuing authorities for availing benefits under the Central Sector Interest Subsidy (CSIS) loan scheme?

The income certificate issuing authorities are as follows:

  • Village Tehsildar
  • District Magistrate
  • Collector
  • Revenue Circle Officer
  • Sub-Divisional Magistrate
  • Other Relevant District Authorities


  1. Source of Information: Buddy4Study app compiles details on scholarships/fellowships from government websites and private scholarship sources. Links to the official sources accompany each listing detail pages.
  2. Non-affiliation: The Buddy4Study app is not associated with any government entity in India or elsewhere. When featuring government scholarships, we rely on publicly accessible information from central and state government websites in India.

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