Govt. Initiatives and Low Interest Education Funding Solutions in India!

Being a part of the knowledge-driven economy, study options, academic flexibility and easy availability of low-interest education loans are the major determinants prompting aspirants to look out for higher education options available in the domestic parlance as well as abroad. Upsurge in young talents joining premier educational institutions in other States in India as well as abroad has been aided by a variety of reasons such as enhanced exposure, learning infrastructure, industry linkages and networking, and campus placement opportunities etc. An increasing number of students are also joining universities and colleges in India and abroad to reap the benefits of pursuing a course of their choice in a multicultural environment.

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We are aware of the fact that the National Education Policy (NEP) 2020 states a vision of improvement of Gross Enrolment Ratio (GER) in higher education from about 27% in 2019-20 to 50% by the year 2035. As a result, encouraging the students to continue pursuing their education, particularly those hailing from Economically Weaker Sections of the society need sustained policy initiative. With the rising cost of education, many students struggle to bridge the gap between their dreams and the financial capability to pursue them. This is where low-interest education funding solutions play a big role, offering a lifeline to young talents seeking higher education, both in India and abroad.

Govt. Initiatives and Low Interest Funding Solutions: An Overview!

A holistic education funding solution involves a matching combination of scholarship schemes and low-interest education funding. This can prove to be a game-changer for students seeking to minimise financial burden in pursuance of their academic goals. Education funding solutions comprises multiple options designed to make education more affordable. It is offered with lower interest in comparison to traditional personal loans, making them more sustainable to finance studies. Let us take a look at the policy initiatives,  schemes and programmes for ensuring low-interest education funding solutions.

Government’s Initiatives and Support!

One of the major objectives of the Government is to ensure that no student is deprived of the opportunity to pursue their academic dreams simply because she or he is poor. To fulfill this intended objective, the Department of Higher Education (DHE) has launched several schemes to provide financial assistance, particularly to those students who are economically weak to pursue their higher education. It is offered in the form of scholarships, interest subsidies on education loans and credit guarantees for education loans. Students from all the categories viz. General, SC, ST, OBC and PwD are eligible to avail financial assistance.  

The financial assistance schemes of the DHE are run under the umbrella scheme ‘Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana’. For scholarships and fellowships offered by the UGC and AICTE, interested applicants are advised to visit their respective websites and online platforms. Let us take a look at the PM-USP Yojana.  It has 3 components and they are as under:

  • Central Sector Scheme of Scholarship (CSSS) for College and University Students
  • Special Scholarship Scheme for Jammu & Kashmir and Ladakh
  • Central Sector Interest Subsidy Scheme (CSIS)
  • Credit Guarantee Fund Scheme for Education Loan (CGFSEL) 

Besides, the Department of Higher Education (DHE) also ensures the facilitation of the nomination process of meritorious and eligible students for External Scholarships offered by friendly foreign countries. They are as under:

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National Scholarships:

  • Central Sector Scheme of Scholarship for College and University Students
  • Special Scholarship Scheme for Jammu & Kashmir & Ladakh

External Scholarships: 

  • Commonwealth Masters’ Scholarships for the United Kingdom 
  • Scholarships offered by South Korea, Israel, Japan, etc. 

– Central Scheme of Interest Subsidy for Educational Loans for inland studies 

– Dr. Ambedkar Central Scheme of Interest Subsidy on Education loans for overseas studies for OBC & EBC.

Low Interest Funding Solutions in India

To gain an enhanced perspective on low interest funding solutions, let us consider the following case of  ‘Interest Subsidy Educational Loans’ provided by Canara Bank, the officially recognised nodal bank by the Govt. of India to administer subsidy to scheduled banks.

There are considerable benefits available for the applicants. Let us take a closer look at the following benefits:

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  • Easy availability of education loans to pursue higher studies.
  • No processing charges are incurred.
  • High quantum of loan is sanctioned.
  • No collateral security is required.
  • Lower rates of interest apply.
  • Reducing balance interest rate apply. 
  • Absence of prepayment penalty.

Central Scheme of Interest Subsidy for Educational Loans for inland studies

The Ministry of Education (Erstwhile Ministry of Human Resource Development) launched a Scheme titled “Central Sector Interest Subsidy Scheme” (CSIS) in 2009. The scheme provides full interest subsidy during the moratorium period on loan availed under Model Education Loan Scheme of Indian Banks’ Association (IBA) for pursuing technical/professional courses in India. Indian Banks Association (IBA) formulated this comprehensive model educational loan scheme for adoption by all Banks. Canara Bank is the nodal agency to administer subsidies to scheduled banks.

Eligibility Criteria:

  • This scheme is available only for education loans availed from Scheduled Banks for pursuing any of the approved courses after Class XII in Technical and Professional streams from recognised institutes in India under the Educational Loan Scheme of IBA.
  • Applicants from the  Economically Weaker Sections (EWS) with annual gross parental/family income from all sources with an upper limit of 4.50 lakh are eligible. Certificate to this effect issued by authorised officers of State Government is to be submitted by the applicants.
  • Full interest subsidy is available for the following period of moratorium i.e. Course Period plus 1 year.
  • This scheme is applicable for the loan amount availed from April 01, 2009 onwards.
  • For loans sanctioned earlier to 1.04.2009, only amounts disbursed during the above mentioned period shall be considered eligible.

Eligible students should connect with the contact branches where they have availed/availing loans for further details. Communication details of the Canara Bank is given below.

Canara Bank
Government Portal Section,
Government Service Wing, Head Office (Annex),
2nd Floor, Tower 2, Jeevan Bharti Building,
Sansad Marg, New Delhi-110001
Email: hogsw@canarabank.com;hogps@canarabank.com
Website: www.canarabank.com

Modification of the Existing CSIS Scheme

Under the umbrella of Pradhan Mantri Uchchatar Shiksha Protsahan (PM-USP) Yojana Guidelines for the component scheme –  Central Sector Interest Subsidy (PM-USP CSIS), the existing CSIS scheme has been modified with the approval of the Union Cabinet on 19.01.2022. This is applicable for education loans taken w.e.f. 01.04.2022. Let us take a look at the scope and other details. 

Scope 

  • The Scheme is to be adopted by all Scheduled Banks/Regional Rural Banks (RRBs)/Cooperative Banks and is linked with the existing Model Educational Loan Scheme of the Indian Banks’ Association.
  • Interest Subsidy under CSIS is admissible only once either for undergraduate or postgraduate or integrated course. 
  • Under the scheme, interest subsidy on education loans is provided for a maximum amount of       10 lakh.

(Note:- Even the sanctioned loan amount in excess of 10 lakh would qualify for interest subsidy up to 10 lakh only).

  • In the CSIS scheme, no collateral security or third party guarantee is required for Education Loan sanctioned up to 7.5 lakh. 
  • The loanee bank should ensure that this part of the loan is covered for guarantee under Credit Guarantee Fund Scheme for Education Loan (CGFSEL). 
  • Under the Scheme, the interest payable on the educational loan for the moratorium period, i.e. course period plus one year will be borne by the Government of India.
  • After the period of moratorium, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Model Educational Loan Scheme of Banks and as may be amended from time to time. 

Eligibility of students for CSIS

  • Education Loans should have been availed under the IBA Model Education Loan Scheme.
  • Applicants having gross parental/family income up to 4.5 lakh per annum are eligible.
  • Students enrolled in professional/ technical courses only from NAAC accredited Institutions or professional/ technical programmes accredited by NBA or Institutions of National Importance or Central Funded Technical Institutions (CFTIs). 
  • Those Professional Institutions/programmes, which do not come under the ambit of NAAC or NBA, would require approval of the respective regulatory body. 
  • The scheme is admissible only once either for Undergraduate or for Postgraduate degree courses. This is also admissible for Integrated Courses (Graduate + Postgraduate). 
  • Students availing any other Central /State Government Scholarship or Fee reimbursement shall not be eligible for availing benefits under CSIS Scheme.
  • Interest Subsidy under this Scheme shall not be available to those students who discontinue their course midstream, or who are expelled from the Institution on disciplinary or academic grounds. 
  • However, the interest subsidy would be available only if discontinuation is due to medical grounds for which necessary documentation to the satisfaction of the Head of educational institution needs to be provided. 

Interest Rates

  • The interest rates charged on the educational loan shall be applicable as per the Benchmark Prime Lending Rate (BPLR)/Base Rate of the individual banks. This will be in accordance with the provisions for interest rates under the IBA Model Educational Loan Scheme.

Moratorium Period 

  • Under the CSIS Scheme, moratorium period has been defined as Course Period plus one year.
  • Interest for only the moratorium period, at a simple rate of interest will be paid by the Government of India. This will be subject to the condition that the student completes the course of study successfully. 
  • After the period of moratorium, the interest on the outstanding loan amount shall be paid by the student, in accordance with the provisions of the existing Model Educational Loan Scheme of Banks. This may be amended from time to time.

Income Limit/Proof

  • The benefit of the Scheme is applicable to students from economically weaker sections.
  • Their gross parental/family income should be up to 4.5 lakh per annum from all sources combined. 
  • Income proof should be approved from the authorised Public Authority of the State Government. 
  • The scheme is independent of any other schemes which may cater to economically weaker sections. 

Competent Authority 

  • The Ministry of Education, Government of India has issued an advisory to all the State Governments requesting them to designate appropriate authority or authorities who are competent to issue income certificates.
  • Income certificates shall be based on economic index and not social background, for the purpose of this scheme. 
  • The Banks shall implement the scheme based on the notification of the certification authority by State Governments communicated through District Level Consultative Committees (DLCCs). 8. 

Similar Schemes and Low Interest Funding Solutions in India

  • The National Minorities Development and Finance Corporation (NMDFC) offers an Educational Loan Scheme for individual beneficiaries. It is implemented through State Channelizing Agencies (SCAs).

The following government agencies also provide education loans to the students of the target group for higher education.

  • The National Safai Karamcharis Finance and Development Corporation (NSKFDC)
  • National Backward Classes Finance and Development Corporation (NBCFDC)
  • National Scheduled Castes Finance and Development Corporation (NSCFDC)
  • National Handicapped Finance and Development Corporation (NHFDC) under the Ministry of Social Justice and Empowerment
  • National Scheduled Tribes Finance and Development Corporation (NSTFDC) under the Ministry of Tribal Affairs
  • Interest on Education Loan provided under the educational loan schemes of these six corporations listed immediately above, if the loans are meant for pursuing professional courses after XII class, it shall also be subsidised for the period of moratorium as per the terms and conditions of this scheme. 
  • The interest charged by NMDFC, NSKFDC, NBCFDC, NSCFDC, NHFDC and NSTFDC are to be paid by the Government directly to the respective Corporations. 

 Nodal Bank

  • The Canara Bank is the Nodal Bank for the Ministry of Education.
  • The Scheme shall continue to be implemented through Canara Bank.
  • Modalities for implementation and monitoring shall be finalised in due consultation with the Canara Bank.

Applicable Academic Year

The modified scheme shall be applicable from the academic year 2022-23, starting 1st April, 2022. 

List of Technical/Professional Courses 

List of Centrally Funded Technical Institutions and Institutions of National Importance is available on the website of the Ministry of Education website. 

The list of NAAC accredited universities/institutions is available at NAAC website. 

NBA recognised professional courses are available at NBA website.

In case of doubt, related to eligibility of course under the scheme etc., banks may approach University Grants Commission (UGC)/All India Council for Technical Education (AICTE) and other councils for clarification, for which UGC/AICTE and other councils would be requested to create Cells and identify Nodal Officers, whom banks can approach for relevant information. It shall be the responsibility of the loan disbursing bank to ensure that only technical/professional courses are covered by them under the scheme.  

Disbursement of Interest Subsidy Claims

  • The disbursement of interest subsidy claims to the Nodal Bank shall be done on Quarterly/Half yearly/Yearly basis. This shall be decided by the Ministry of Education, Government of India. 
  • Nodal Bank shall disburse the subsidy in the Education Loan account of the beneficiaries in DBT mode through PFMS Portal. 
  • It will be the sole responsibility of lending banks to claim interest subsidy on behalf of eligible beneficiaries on yearly basis. 
  • If any of the lending banks fails to claim interest subsidy for the current year, the backlog claim of interest subsidy will not be entertained. 
  • Any delay in submission or non submission of claim by the loanee bank to Canara Bank, the Department of Higher Education will not be responsible for such delay/ non-submission of claim and nonpayment of interest subsidy. 

Interest Concession 

  • Under the IBA Scheme, 2021, Banks at its discretion may provide 1% interest concession if interest is serviced during the study period and subsequent moratorium period prior to commencement of repayment.
  • However, the subvention/subsidy provided by the Government should not be a cause for providing 1% concession in rate of interest. 

Claims by Regional Rural Banks (RRBs)

  • The Regional Rural Banks (RRBs) should submit their claim directly to Canara Bank, the nodal bank.
  •  RRBs should not route it through the sponsor bank. 

Dr. Ambedkar Central Scheme of Interest Subsidy on Education loans for overseas studies for OBC & EBC.

Implementation of Dr. Ambedkar Central Sector Scheme of Interest Subsidy (ACSIS) will provide interest subsidy to the student from the other Backward classes (OBC) and Economically Backward Classes (EBC) during the moratorium period under the IBA model Education loan scheme for overseas studies to pursue the Master, M.Phil and Ph.D courses. It may be pointed out that as far as educational loan for OBCs and EBCs (under SHREYAS) during 2023-24 is concerned, the banks are not considering/accepting fresh applications under the ACSIS Scheme till further orders or guidelines.

We are in receipt of a communication from the Nodal Bank (Canara Bank) on the captioned scheme advising that the Ministry of Social Justice and Empowerment (MoSJE), Government of India (Gol) have conveyed that the Banks should not consider/ accept any fresh applications under the ACSIS Scheme till further guidelines.

Low Interest Education Loan Scheme for Pursuing Masters Degree

Low interest education loan scheme for pursuing masters degree is being implemented through Canara Bank.

Eligibility

  • Indian National holding valid passport
  • Student should have secured admission from the select institution
  • Student with minimum required score in SAT, ACT, GMAT & GRE competitive exam as stipulated as below:
    • SAT – 1250 & above
    • ACT – 26 & above
    • GRE – 300 & above
    • GMAT – 650 & above

Benefits

  • Loan to pursue Master’s Degree Abroad
  • Minimum Processing Charges
  • High Quantum of Loan
  • Lower Rate of Interest
  • Reducing Balance Interest Rate
  • No Prepayment penalty
  • Quick processing and disbursement

Features

Objective Educational loan scheme meant for studies abroad in select top ranked universities.
Loan Amount
  • Minimum loan amount is above 7.50 lakh
  • Maximum amount depends on the collateral coverage as follows:
Collateral Coverage Eligible Loan Amount
100% and above Minimum 7.50 lakh, Maximum no cap (as per project cost)
Less than 100% Maximum 100 lakh
Eligible Courses Master Degree under STEM (Science, Technical, Engineering and Management) courses.
Margin 10% of Loan amount. (Margin may change in year on year basis as and when disbursements are made on a pro rata basis)
Processing Charges
Collateral Security Coverage Applicable Processing Charges
100% and above 0.50% of sanctioned limit with maximum of 10,000
Less than 100% 0.50% of sanctioned limit with maximum of 20,000
Security
  • Assignment of future income of the student.
  • Parent/guardian has to join as a Co-borrower.
  • Collateral security from maximum 100% to minimum 50%. 

*Terms & conditions apply

Repayment Tenure
  • Repayment of the loan will be done in equated monthly installments (EMI) up to a maximum of 15 years excluding the moratorium period which is course period plus one year.
  • For skill development loan, 3 to 7 years depending upon the loan amount.
Expenditures Covered
  • 100% finance on tuition fees
  • Travel expenses/passage money for studies abroad
  • Living expenses for studies abroad
  • Medical insurance premium for student borrower, if applicable

Vidya Turant 

Vidya Turant is a low interest premium education loan product of Canara Bank wherein collateral/ security free education loans are ensured and granted to the students pursuing their studies in premier institutions in India with concessional rate of interest.

Eligibility Criteria

  • Applicant should be an Indian National. 
  • Students should have cleared the previous qualifying exam and been selected through an entrance test conducted by the competent authorities.

Benefits

  • Loan to pursue higher studies
  • No processing charges
  • High amount of loan
  • Lower Rate of Interest
  • Reducing Balance Interest Rate
  • No collateral security
  • No prepayment penalty
Objective Provisioning hassle free education loan to meritorious students pursuing their higher studies in select institutions viz., selected IIMs/IITs/NITs/IISc. /ISB (Hyderabad & Mohali) including other reputed institutes.
Loan Amount Category Institutions Maximum Eligible Limit
1 Students of ISB, Hyderabad and Mohali Limit up to ₹50 lakh
2 Students of IIMS (19 nos), IITs (23 nos), Symbiosis Groups (5 nos), BITS (4 nos), IIFT (2 nos), IMI (1 nos), IRMA (1 nos), ISM (1 nos), IMT (1 nos), KJSIMSR (1 nos), MDI(1 nos), SPJINMR(1 nos), NMIMS(1 nos), RGIIM(1 nos), XIM(1 nos), XLRI (1 nos) Limit up to ₹40 lakh
3 All other institutions other than A and B (109 nos) Limit up to ₹30 lakh
Margin NIL (Scholarship/assistantship if any to be included in margin.)
Processing Charges NIL
Security
  • Assignment of future income of the applicant.
  • No security up to specified limits for institutions as per the maximum limit specified below:
    • For a limit up to ₹50 lakh (Group ‘A’ Institutes – Example – Indian School of Business)
    • For a limit up to ₹40.00 Lakhs (Group ‘B’ Institutes – Example – IIMs & Other Premier Institutes)
    • For a limit up to ₹30.00 Lakhs (Group ‘C’ Institutes – Example –  IIITs & Other Premier Institutes)
Repayment Tenure
  • Repayment of the loan will be made in equated monthly installments (EMI) up to a maximum of 15 years excluding the moratorium period which is course period plus one year.
  • No prepayment penalty will be applicable for prepayment of loan any time during the repayment period.
Expenditures covered under the loan
  • Fee payable to school/college/hostel
  • Fee payable for examination/library/laboratory
  • Travel expenditures/passage money for studies abroad
  • Insurance premium for borrower applicant, if applicable
  • Caution deposit, building fund/refundable deposit duly supported by bills/receipts of the institution.
  • Purchase of computer at reasonable cost, if necessary for completion of the course
  • Purchase of books/equipments/instruments/uniforms
  • Any other expenditures required to complete the course – like study tours, project work, thesis etc.
  • Reasonable lodging and boarding charges shall be covered in case the student chooses/is required to opt for outside accommodation
Eligibility under CSIS Scheme All education loans under Vidya Turant can be covered under CSIS scheme (Central Scheme of Interest Subsidy on Education Loans), subject to eligibility criteria, as per income & other norms.

IBA Skill Loan Scheme

Canara Bank’s IBA Skill Loan Scheme offers low interest loan schemes for nurturing skill development. It motivates applicants to access funding for skill-based courses and enhance their employability and income prospects. It seeks to develop support for the national initiatives for skill development.

Eligibility Criteria

  • Applicant should be an Indian National. 

Benefits

  • No collateral security
  • Zero margin
  • Lower Rate of Interest
  • Reducing Balance Interest Rate
  • No prepayment penalty
  • Quick processing and disbursement
Objective Skill loan scheme has been developed to support the national initiatives for skill development.
Loan Amount Need-based finance in the range of 5000 to 1,50,000.
Eligible Courses Courses run by Training Institutes aligned to National Skill Qualification Framework (NSQF) shall be covered by the Skill Loan. There is no minimum course duration applicable.
Margin Zero
Processing Charges zero
Security
  • Assignment of future income of the applicant.
  • Loan is granted jointly with the parent/guardian of the student.
  • The loan will be covered under the Credit Guarantee Fund Scheme for Skill Development (CGFSSD).
  • No collateral or third party guarantee is required.
Moratorium Moratorium period from 6 months to 1 year depends on the course period.

Course Period Moratorium Period
Up to 1 year 6 months from the date of completion of course
Above 1 year 12 months from the date of completion of course
Repayment Tenure Repayment period from 3 years to 7 years depend upon the loan amount.

Loan Amount Repayment Tenure
Up to 50,000 Up to 3 years
Above 50,000 and up to 1,00,000 Up to 5 years
Above 1,00,000 Up to 7 years

IBA Model Education Loan Scheme

Canara Bank’s IBA Model Education Loan Scheme, empowers education dreams by helping  secure funding for higher studies with flexible loan repayment and low-interest loans.

Eligibility Criteria

  • Applicant should be an Indian National. 
  • NRI Students should hold a valid Indian passport.

Benefits

  • No collateral required for loan up to 7.5 lakh
  • Lower Rate of Interest
  • Reducing Balance Interest Rate
  • No prepayment penalty
  • Quick processing and disbursement.
Loan Amount
  • Need-based loan options
  • Students may submit their loan applications either at the bank branches near to their residence or bank branches near to the educational institution where they are pursuing their studies.
Eligible Courses
  • Inland Studies: Graduation, post graduation, including technical/professional courses from reputed colleges/universities approved by UGC/Government, AICTE/Department of Electronics/IMC, autonomous institutions like IIM, IIT, etc. Any courses leading to degree/diploma from reputed Institutes/Colleges/Universities for studies in India.
  • Studies Abroad: Courses which lead to undergraduate, postgraduation/PhD, Postgraduate Diploma etc. are eligible.
Margin Up to 4 lakh – Zero

Above 4 lakh:
For studies in India – 5%
For studies abroad – 15%

Security
  • Assignment of future income of the applicant.
  • Merit Quota:
Loan Amount                           Security
Up to 7.5 lakh 
  • No collateral Security, loan will be covered under Credit Guarantee Fund Scheme for Education loans (CGFSEL) scheme subject to the given conditions
  • Loan is offered and granted jointly with the parent/Guardians of the student.
Above 7.5 lakh 
  • Tangible collateral security to cover at least 100% of the loan amount.
  • Loan is granted jointly with the parent/guardians of the applicant.
  • Management Quota :
Loan Amount                                           Security
Up to 4 lakh
  • No collateral Security
  • Loan is granted jointly with the parent/Guardians of the student
Above 4 lakh
  • Tangible Collateral security to cover at least 100% of the loan amount.
  • Loan is granted jointly with the parent/Guardians of the student.
Repayment Tenure
  • Repayment of the loan will be in equated monthly installments (EMI) up to a maximum of 15 years excluding the moratorium period which is course period plus one year.
  • No prepayment penalty will be applicable for prepayment of loan any time during the repayment period.
Expenses Covered for Loan
  • Course fee payable to college/school/hostel.
  • Fee payable for examination/library/laboratory.
  • Travel expenditures/passage money for studies abroad.
  • Insurance premium for borrower applicants, if applicable.
  • Caution deposit, building fund/refundable deposit supported by bills/receipts of the institution.
  • Purchase of books/equipment/instruments/uniforms.
  • Purchase of computer at reasonable cost, if necessary for completion of the course.
  • Any other expenditure required to complete the course subject to ceiling.

Let us take a look at some of the popular and relevant low-interest government education funding solutions. They are as follows:

Bihar Credit Card Loan Scheme: This scheme helps financially challenged students from Bihar pursue higher education. Eligible students can borrow up to ₹4,00,000 at an affordable interest rate (starting at 4% with concessions for some groups). To qualify, you must be a Bihar resident who has passed Class 12 and secured a place in a recognised higher education program (general, professional, or technical).

For more information and to apply, visit the Bihar government website or your nearest District Registration and Counseling Center. This scheme can bridge the financial gap and empower students to achieve their academic goals.

Bihar Credit Card Loan Scheme

NSFDC Education Loan Scheme: The students hailing from the Scheduled Caste (SC) categories in India can avail low-interest educational loans via the NSFDC Scheme. To qualify, students must belong to the Scheduled Caste (SC), be an Indian citizen with a family income under ₹3,00,000 annually, and be pursuing a government-approved professional/technical course. Loan amounts vary depending on whether you study in India (up to ₹30,00,000) or abroad (up to ₹40,00,000 or 90% of fees). Competitive interest rates apply, with an additional 0.5% concession for female students. The NSFDC works through State Channelising Agencies (SCAs) so you’ll need to contact your district SCA office for application details.

Maulana Azad Education Loan Scheme, Maharashtra: This scheme offered by the State Government of Maharashtra helps minority students in the state to finance and pursue their higher education. It offers education loans up to ₹5,00,000 for professional or diploma courses at a lower interest rate of 3%. Students from families with an annual income below ₹2,50,000 are eligible. There’s a separate loan category for specific courses with higher limits but varying interest rates based on gender. To qualify, students must be 16-32 years old, belong to a minority community, and be enrolled in a recognised institution (excluding BA/B.Com). Repayment begins after 6 months of completing the course or getting a job. Women and disabled applicants receive preference. For details and application procedures, visit the MAMFDC website

Maulana Azad Education Loan Scheme

Cent Vidyarthi Education Loan Scheme: Central Bank of India’s Cent Vidyarthi scheme offers education loans up to ₹2 crore for exceptional cases with collateral. It provides funding for pursuing studies in India and abroad (up to ₹20 lakh for professional courses). Interest rates are capped at 11.50% with a potential 1% concession for on-time interest payments during studies. To be eligible, you must be an Indian citizen with admission to a recognised institution. The scheme provides a flexible repayment period (up to 15 years) with a one-year grace period after completing your course. They even facilitate payments directly to your college or other relevant entities. For further details, visit the Central Bank of India website.

Also Read: How to Get an Education Loan after Class 12: Types of Education Loans

Some of the popular government and private scholarship/grant options include the following:

National Overseas Scholarship Scheme: This scholarship provides financial aid to students from disadvantaged communities in India (Scheduled Castes, Nomadic Tribes, etc.) for pursuing a Master’s or PhD abroad. It covers full tuition fees, living expenses, airfare, and even an annual grant for books. To qualify, students must have at least 60% marks in their qualifying exam and secure admission to a foreign university. Applications typically begin in the month of February and close around March/April. It can be directly applied through the website of the Ministry of Social Justice and Empowerment. Selection is merit-based, along with interviews for shortlisted candidates. 

Esri India Master’s Scholarship Program 2024: The Esri India Master’s Scholarship Program awards 1 lakh rupees annually to 10 Indian students entering their second year of GIS-related postgraduate programs. This scholarship recognises academic excellence and offers financial aid to talented students passionate about GIS. The last date to apply for this scholarship for the academic year 2024 is 10th July 2024. Eligible candidates can apply online through the official website.

UK-India TOEFL Scholarship 2024: Indian students aiming for Fall 2024 or Spring 2025 undergraduate/postgraduate studies in a UK university shouldn’t miss the UK-India TOEFL Scholarship. Offered by NISAU and ETS TOEFL®, it awards ₹2,50,000 to 10 students. To be eligible, you must be an Indian citizen with a valid passport, have a minimum TOEFL® score of 75 with an admission offer from a UK university for the target semesters. The scholarship helps cover education-related expenses and recognises academic merit for pursuing higher education in the UK. Interested applicants can apply through the official website of ETS India by 15th July 2024.

HOPE Engineering Scholarship by Schaeffler India:  The scholarship programme aids in bridging the financial gap for underprivileged engineering students in Gujarat, Maharashtra, and Tamil Nadu. Offering up to ₹75,000 annually, it prioritises students scoring above 60% in Science (Class 12) aiming for specific engineering fields. Check Schaeffler India’s website for application details. 

Also Read: Exploring International Education: Government’s Initiatives 2024!

Benefits of Low-Interest Education Funding:

Low-interest education funding offers a multitude of benefits for students in India, making higher education more accessible and manageable:

  • Reduced Financial Burden: The most significant advantage is the substantial decrease in overall education costs. Lower interest rates translate to lower monthly payments, freeing up your finances for other necessities. This allows you to focus on your studies without the stress of mounting debt.
  • Increased Access to Education: Low-interest options make quality education more attainable, especially for students from economically weaker sections (EWS). Schemes like the Central Sector Interest Subsidy Scheme (CSIS) and readily available loans from PSBs open doors for students who might otherwise struggle to afford higher education.
  • Improved Career Prospects: A degree can significantly enhance your employability and earning potential. Low-interest funding allows you to invest in your future without crippling debt, positioning you for a better financial standing in the long run.
  • Flexibility and Peace of Mind: Loan repayment plans with extended terms and moratorium periods during studies provide flexibility to manage your finances comfortably. Lower interest rates also mean less pressure to secure high-paying jobs immediately after graduation. This allows you to focus on building your career without the burden of high debt payments.
  • Promotes Social Mobility: Low-interest funding helps bridge the gap between social classes by making education more affordable. Students from disadvantaged backgrounds have a greater chance to pursue higher education and improve their social and economic standing.
  • Investing in the Future: Education is an investment in yourself and the nation’s future. A well-educated workforce contributes to economic growth and development. By facilitating access to education, low-interest funding benefits both individuals and society as a whole.

Education Funding Solutions

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

Conclusion:

The high cost of education can be a significant hurdle for students in India. However, numerous low-interest funding options along with scholarship schemes provide for a flexible and optimised education funding solution in making your academic dreams a reality. Government schemes like CSIS and CGFSEL offer interest subsidies and loan guarantees, while Public Sector Banks provide competitive rates. Scholarships from various sources can further reduce your loan burden.

A strategic selection of options and combining these options with an effective plan can significantly reduce your dependence on high-interest loans. Exploring suitable scholarships, maintaining good academic records, and comparing loan offers with low interest rates can help secure the best education funding solution. Remember, a well-funded education paves the way for a brighter future, both for you and for India’s growth. Take advantage of these low-interest opportunities and invest in your success!

Frequently Asked Questions (FAQs)

Which Public Sector Bank has been assigned the responsibility to administer subsidy to scheduled banks

Ans. The CANARA BANK has been assigned the responsibility to administer subsidies to scheduled banks.

What are the different types of low-interest education funding solutions available in India?

Ans. Given below are the types of low-interest education funding options available for students who are willing to pursue higher education:

  • Government Schemes: The Central Sector Interest Subsidy (CSIS) and Credit Guarantee Fund Scheme for Education Loan (CGFSEL) are two key programs.
  • Low-Interest Education Loans: Public Sector Banks (PSBs) generally offer lower interest rates compared to private banks.
  • Scholarships: Numerous scholarships from central/state governments, minority welfare schemes, and private organizations can significantly reduce loan dependence.

Which PSBs offer low-interest education loans?

Ans. Many PSBs offer competitive rates. Research individual banks for the latest information. Some examples include the Bank of India, the Union Bank of India, and the State Bank of India (SBI).

What are some additional things to consider when applying for low-interest funding?

Ans. Following are some of the things that are required to be considered while applying for a low-interest education loan:

  • Margin Requirement: Some banks might require a down payment. Look for options with nil or minimal margin.
  • Processing Fees: Banks may charge processing fees. Explore options with waived or lower fees, especially for government schemes.
  • Repayment Options: Choose a loan with a repayment plan that fits your budget. Consider the moratorium period offered during studies.

What factors affect the interest rate offered by a bank for an education loan?

Ans. Several factors influence the interest rate on the education loan in India. The credit score is a major one, as a good score indicates that the borrower is reliable. The type of course you’re taking can also affect the rate, with job-oriented fields potentially having lower rates. The loan amount itself can be a factor, with smaller loans possibly having slightly higher interest rates. Finally, the bank you choose has its own risk assessment and interest rate structures.

How can I manage my finances effectively while pursuing higher education?

Ans. Effective financial management during higher education requires planning and discipline. Create a budget outlining your income (scholarships, part-time jobs) and expenses (rent, food, books). Track your spending to identify areas for saving. Explore government schemes, scholarships, and low-interest loans to minimize debt. Utilise student discounts and seek cost-effective solutions for housing and study materials. This proactive approach will keep your finances under control throughout your studies.

What is the eligibility requirement for Canara Vidya Turant? 

Ans. Applicant student should be an Indian National. He/She should have cleared the previous qualifying exam and should have received an admission offer letter from the institute where the student has applied for the course.

What is the Rate of Interest/interest rate and how is it charged in general ?

Ans. The interest rate, generally, can be defined as the cost of debt for the borrower and the rate of return for the lender. During the course duration and moratorium period, the interest rate is charged in general at Simple Interest (S.I) and thereafter at Compound Interest (C.I).

If my parents’ credit risk rating like CIBIL is poor, in that case am I eligible to apply for a loan? 

Ans. Yes. 

Whether Canara Vidya Turant loan is eligible for CSIS (Central Scheme of Interest Subsidy on Educational Loans)? 

Ans. Yes. All Education loans sanctioned under Vidya Turant can be covered under CSIS scheme (Central Scheme of Interest Subsidy on Educational Loans), subject to eligibility, as per income & other norms.   

Where shall I contact to avail Canara Vidya Turant? 

Ans. A student can approach either the designated Canara Bank branch located near to their institute or any other branch near to their place of residence. Applicants can also follow the web link http://www.canarabank.com/canara.aspx to apply for the loan through Vidya Lakshmi portal at http://www.vidyalakshmi.co.in/students/signup .  

Disclaimer

  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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